Monday, October 28, 2013

The Next Obamacare Fiasco

Thousands Of Consumers Get Insurance Cancellation Notices Due To Health Law Change Kaiser Health News

Some health insurance gets pricier as Obamacare rolls out Los Angeles Times

Kaiser:
Health plans are sending hundreds of thousands of cancellation letters to people who buy their own coverage,...The main reason insurers offer is that the policies fall short of what the Affordable Care Act requires starting Jan. 1

Florida Blue, for example, is terminating about 300,000 policies, about 80 percent of its individual policies in the state. Kaiser Permanente in California has sent notices to 160,000 people – about half of its individual business in the state. Insurer Highmark in Pittsburgh is dropping about 20 percent of its individual market customers, while Independence Blue Cross, the major insurer in Philadelphia, is dropping about 45 percent.

LA Times:
Blue Shield of California sent roughly 119,000 cancellation notices out in mid-September, about 60 percent of its individual business. About two-thirds of those policyholders will see rate increases in their new policies....
Middle-income consumers face an estimated 30% rate increase, on average, in California due to several factors tied to the healthcare law. Some may elect to go without coverage if they feel prices are too high. Penalties for opting out are very small initially. Defections could cause rates to skyrocket if a diverse mix of people don't sign up for health insurance
This is interesting. Obamacare could actually increase the number of people without insurance, because you are not allowed to keep (consumer) or sell (insurance company) simple cheap insurance.


If you're healthy and have been paying for individual insurance all along -- largely because you know people with preexisting conditions can't get insurance, and you want to lock in your right to continue your policy should you get sick -- there is now a strong incentive to drop out.

The government has just wiped out the value of those premiums you paid all these years -- you don't need the right to buy health insurance anymore, as you can always get it later. You're seeing a large increase in premiums for benefits you don't want and to cross-subsidize other people. The mandate penalties are almost certainly going to be pushed back, they penalties are a good deal less than the cost of health insurance (which you can always get later if you get sick), the IRS has already said it's not going after people who don't pay them. Dropping out of individual health insurance starts to make a lot of sense.

This was bad enough on its own. But if insurance companies cancel these people's policies, all at once,  it's dramatically worse. It would be hard to design a more effective "nudge" to get such people to think about it and conclude that dropping health insurance is a good idea.

The overall numbers may not change. Other reports suggest that poor and sick people have been signing up in droves, mostly to get on the expanded medicaid. But it's an obvious fiscal disaster if Obamacare only attracts the poor and sick, does not attract the young and healthy -- and now drives away the healthy people who were provident enough to buy individual health insurance!

Why is this happening? A curious tidbit
All these cancellations were prompted by a requirement from Covered California, the state's new insurance exchange. The state didn't want to give insurance companies the opportunity to hold on to the healthiest patients for up to a year, keeping them out of the larger risk pool that will influence future rates.
The destruction of the off-exchange individual insurance market is deliberate.

The best quote of the bunch, from the LA Times
Pam Kehaly, president of Anthem Blue Cross in California, said she received a recent letter from a young woman complaining about a 50% rate hike related to the healthcare law.

"She said, 'I was all for Obamacare until I found out I was paying for it,'" Kehaly said.
This realization will come soon to millions more.

67 comments:

  1. "I was all for Obamacare until I found out I was paying for it"

    QUOTE OF THE YEAR

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    1. I find it saddening. That person is either ignorant or depraved, and neither is very comforting.

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  2. Here's another one. Collect them all (If your hard drive is large enough)! http://www.theblaze.com/stories/2013/10/07/obamacare-supporter-of-course-i-want-people-to-have-health-care-i-just-didnt-realize-i-would-be-the-one-who-was-going-to-pay-for-it/

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  3. Doesn't the kaiser News you cite say "By all accounts, the new policies will offer consumers better coverage, in some cases, for comparable cost -- especially after the inclusion of federal subsidies for those who qualify. The law requires policies sold in the individual market to cover 10 “essential” benefits, such as prescription drugs, mental health treatment and maternity care. In addition, insurers cannot reject people with medical problems or charge them higher prices. The policies must also cap consumers’ annual expenses at levels lower than many plans sold before the new rules."

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    1. It does. The question is, what will people do who get letters saying their policy has been terminated, along with it the need to buy insurance while you're well so you have it when you're sick, and there will be a huge increase in premium? What will people do who don't take expensive prescription drugs, don't have mental health problems, don't plan to have kids any time soon or already had them, don't now spend a lot out of pocket; and don't qualify for subsidies? People who had insurance just in case -- ideal customers?

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    2. Note the qualifier: "in some cases".

      As in "You can keep your doctor - in some cases" and "You can keep your present coverage - in some cases".

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    3. Chart of cost of new/old by state.
      http://www.heritage.org/~/media/InfoGraphics/2013/10/How%20Will%20You%20Fare%20in%20the%20Obamacare%20Exchanges/IB-premium-exchange-by-state-table-1-1200%20A.ashx

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    4. RE: Prof. Cochrane's comment:

      What will those persons do? Well, they'll probably buy a new, more expensive plan. That's the entire point of the law; the risk is transferred to the insurance company, financed by the healthy. This is neither surprising nor necessarily "bad".

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    5. No, these healthy people who's policies are being cancelled will not buy insurance because it is more expensive, and now that they can get it when they are sick they have no incentive to buy while they are healthy. They can just wait until they get sick and then buy insurance.

      So this may drive healthy people out of the system... would this mean that rates across the board would increase without the healthy people balancing out the sick?

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    6. My guess a fair number of those people will sign up for new insurance. After all, if they "don't take expensive prescription drugs, don't have mental health problems, don't plan to have kids any time soon or already had them, don't now spend a lot out of pocket", then why did they purchase insurance before? what was the point

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    7. They bought insurance when they were well because they knew they couldn't get it when they got sick. The same way you buy house insurance before the fire.

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    8. Right, and they will buy it before they get sick again because you cannot just sign up any time under ObamaCare, but only during special enrollment period. So if you don't sign up and experience a major health event in between enrollment periods, boom, you are seriously screwed.

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    9. Anon, the window you describe is the exchange window. There are still plans available off the exchange that are required under the law to accept those with preexisting conditions, and the enrollment window does not apply to those plans.

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    10. You don't get any subsidies if you don't sign up through the exchange

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    11. you seem very sanguine about other peoples choices. The lack of a simple catastrophic coverage policy will CAUSE PRICES TO SKYROCKET ! Way more than they already have. And no, I am afraid we cannot assume that all people who had coverage before will just suddenly find the extra many thousands of dollars to get more coverage.

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  4. "If you like your health care plan, you can keep your health care plan." Barack Obama

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  5. "it's an obvious fiscal disaster if Obamacare only attracts the poor and sick, does not attract the young and healthy" ?
    > Of course, health care is basically for the sick people, not the healthy ones! That's what hospitals are mostly for. Plus, a public health care works everywhere, from Europe to Latin America (where I live!) and it's way better than the health care in the US. If you are against it, it's obviously because you have never talked to people living abroad.
    Quoting a well-known economist: "Health care is never free, what matters is actually when it's convenient that you pay for it. Is it good from a social point of view that someone who's sick and has a lot of trouble has to also pay a lot of money?" -- BTW, the answer is "no".

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    1. The question is, will it be paid by premiums of healthy people or by general tax revenue?

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    2. The correct answer to the above question is "yes".

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    3. @John: by general tax revenue as it would be more fair. @Jefftopia, you definetely need to travel more and talk to people, watching Fox News is not enough ;-).

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    4. Prof Cochrane: The question is, will it be paid by premiums of healthy people or by general tax revenue?

      I'm not sure that's a good frame: Will the fire insurance premiums be paid by those whose houses don't catch fire or by general tax revenue.

      There is no such thing as a healthy person, just a currently healthy person.

      Never mind the [mind boggling] details of Obamacare for the moment, what's important is mandatory coverage, like Social Security.

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    5. Prof. Cochrane: The question is, will it be paid by premiums of healthy people or by general tax revenue?

      I'm not sure that's a good frame. Will the fire insurance premiums be paid by those whose houses don't burn of from general tax revenue?

      There is no such thing as a healhty person; there can only ever be a person who is not currently ill. That's why mandatory health insurance is necessary for efficiency. That our sausage factory makes it too difficult to work properly should come as no surprise.

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    6. Jancic, I lived in Latin America for many years, we had socialized medicine there, along with a lot of other socialized things. Anyone who could bought private insurance. There is nothing magical about health care. Government can't provide better cars than the private sector, why do you think that health care is different? Then you talk about fairness, what is fair? Government using coercion to restrict your choice is fair? If you want to buy a health plan with high deductibles and the govt doesn't allow it is that fair? If you don't have children because its a huge responsibility and other people don't care and have lots of children is it fair that the government forces you to subsidize them? "To each according to his necessity, from each according from his capacity" sounds familiar?

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    7. Diego, dont know where you live.... I'm in Brazil, and our "public" health care system is decaying. Everyone pays (tax revenue), and pays A LOT, and only the extremely poor use it (the merely poor usually have a cheap insurance so they can die with a little more dignity). Pretty sure we're only better than Africa, and not by much

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    8. John, the penalty for not buying insurance is currently set low. That was done clearly for political reasons, but it can always be raised. Look, these types of ObamaCare like systems do work across the developed world, just look at say Switzerland. So no need to panic.

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    9. I'm not saying that it has to be provided by the gov, the gov just has to make sure that _anyone_ can access to it (can be provided privately). The car comparison is not fair, you can live without a car or buy a 100k car, but you literally can't live (sometimes) without health insurance and not everyone can pay a 100k surgery.
      What I'm just saying is that anyone has the right to live, even if they can't afford an expensive treatment, and that's completely solved in some developed countries (eg, Australia), partially solved in Latin America and "not at all" solved in the US.

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    10. Diego, with all respect, let me clarify what you're saying because usual clich├ęs may confuse you. You are saying that the government must COERCE people to pay for others. Maybe some very rich countries with low population can afford that, but the US is a massive country with over 300 million people. Everyone has the right to live, I agree, but living is not automatic. Living requires work, effort, you are saying that the government must coerce some to pay for the living expenses of others. Some say: "you have a right to health care" Agreed, but health care doesn't grow in trees, who is going to pay for it? You don't have the right to force others to pay for your health care. I have a better Idea: everyone pays for his own stuff and those who have more than what they need voluntarily donate to charities of their choosing to help others.

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    11. Anonymous, don't worry, I'm not confused ;-). That what you're saying is actually not right. I didn't do the numbers, but I would bet that if your taxes haven't been going to a war, then you could easily afford health care. Having more people also means that more people pay taxes, so that's not a valid argument. I agree with the fact that anyone should pay for something that it's not free, the questions are:
      1) Should anyone die because cannot afford a treatment? No, paying a few bucks is less important that someone's live.
      2) How are those things that paid? Most people soon or later will need health care (you will not be 100% healthy until the last day of your life), so instead of each having to pay lots of money when they need it, all pay for it. You will soon or later be thankful.

      Last but not least, US is ranked #38 in health care and your GDP doubles China's, you should be ashamed. Period.

      http://www.youtube.com/watch?v=XV8jDc0kufM

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    12. Diego, I am reading your comments and I find them quite amusing. I usually do not answer these kind of comments but since you sound so much like many of my socialist friends (yes I do have such friends) I have to.

      So you say public plans work everywhere, healthcare treatments are better everywhere than in the U.S. so somehow every socialist country got it right. Not only that, but you pretty much argue for the right to great healthcare - and it must be guaranteed by the state.
      First, we need to find out how you measure "working well", "better treatments" because for one I didn't read any story about people from around the world flying to South America to take advantage of their amazing public healthcare system - maybe some go to Western Europe but trust me they are not doing that great. Second, I would say that even before you need healthcare you need to eat and to dress. So I say, let's have the government guarantee cheap and great food and clothing (by the way we need to sleep too but let's not go there).
      You look young ... this has been tried for 50 years and not was very successful. Read about out Eastern Europe.

      We do have problems in the US but you are missing the main points of the whole discussion. Even if you want to do good (so assume a benevolent dictatorship) you can end up messing up things but giving people the wrong incentives... or there can be unintended consequence of your actions. The above commenter is completely correct too... people should stop comparing Norway and the U.S. - doesn't make much sense.

      Just as an aside, I remember the best ever summary of the state of the healthcare system in the U.S. that I heard from a friend: "the problem with healthcare is that everyone wants the best care they can get but nobody wants to pay for it". Pretty simple hey ... and no fairness argument involved!
      Cheers

      PS Thanks Prof. Cochrane for the postings... you need to continue the good work and encourage even more thoughtful debates on sensitive issues.

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    13. I live under the assumption that, after 3000 years of incredible human progress, healthcare should be considered a human right. Once that is given, programs like Obamacare naturally follow, because if it is a right, then arguments appealing to the notion of "freedom" (whatever that is) automatically fail.

      From an economics perspective, I can't see how we justify *not* mandating universal coverage. Economics is about well-being, not rights; outcomes, not how we get outcomes. Marginal utility declines on each dollar, and human beings are risk averse. Am I a socialist for taking advantage of that? No, I am an economist. Yes, have the young finance the unhealthy; I forecast greater coverage, and greater capacity for the average person to be prepared for the worst. That is what matters.

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    14. Thanks @Jefftopia, finally a comment that makes sense! Regarding what @Anonymous said, I have a degree in Finance and I'm not young, I'm mentally older that many of those arguing about this.
      As you insisted that the US is different than other countries I guess that you're American and still believe that the States is #1, it's unique because of it's diversity and it's freedom. Let me tell you something, go out and meet people and you will find that most people do not envy you at all.

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    15. Naturally you think it makes sense but it does not. Health care cannot ever be a right. Because a right is something that when it is exercised it does not dimenish someone else. My right to speech does not negativly impact you. However health care costs something so to have a right to it (as opposed to a right to access) must of necessity cause someone to pay for it. So if others have to pay for your healthcare it might be an entitlment, but can never be a right. By the way. Why do I always hear some people raving over how other nation's socialized medicine is better than the US, and yet I see literally thousands of peple comming here to the USA from other countries every year for treatments?

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    16. @KyleN you're point is (almost) good. Sounds good at least. It's like a never ending story, but I want to answer to what you said:
      1) A right is not necessarily what you said. You have the right of having a private property, and that means that I cannot walk wherever I want (ie, inside your house!). There are rights based on ethical principles, and the right to live is way above the right of "saving a few bucks" from taxes, if that's even a right. Plus you already pay taxes for a lot of things you probably don't want (political campains, wars, military development, etc, etc, etc)

      2) There are three reasons at least why people go to the US for treatments:
      2.a) Not all countries have good health care, neither public or private, it's just bad, so they have to go some where.
      2.b) The US has the _best_ M.D. in some topics. France has the _best_ in another topics, and a lot of countries have the best MD in other topics. So, if you have a really serious problem, you would definitely travel inside the US or to another country to get the best MD. You probably see many going to the US for treatment, but that happens every where.
      2.c) There are probably countries that apply restrictions to foreigners, so even if live go France, you won't receive the treatment a local will receive.
      2.d) (not a reason, but a comment) American's also travel for insurance, there are a lot traveling to Canada and Mexico just because they cannot afford it over there. And I'm not talking about complex treatment.

      It was a very productive conversation and I won't longer answer. To all believing that having health care is a bad idea: trust me, it works, it's possible in every country and you won't regret when you get old. Consider that today you're young and pay for something that do not use, but you will some day and some day will pay for it because you probably not longer can do it. Some companies want you to believe that it's a bad idea because it's a great business for them; Pharmaceutical (and insurance companies) are maybe the best business that ever existed, and they want your money, not your health.

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    17. Oh, I've read bad your comment. Not sure about the different between entitlement and right (not native speaker). But I think it still applies, whatever you call it. Bye! :)

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    18. Rancic, sad that you take it to a personal level, with commets such as that I should be ashamed or that finally a comment that makes sense, my comment was perfectly logical, even if you don't agree with it.
      Jefftopia: What is freedom? Freedom in the political level means absence of coercion. Got it? No coercion, no restrictions of freedom, no interference between mutually agreeing parties.
      Example:
      Free country:
      Me: Hi, I want a health insurance that is cheap and has high deductibles
      Insurance company: Yeah, no problem
      Socialist country:
      Me: Hi, I want a health insurance that is cheap and has high deductibles
      Insurance company: Sorry, we would like to sell you that, BUT THE GOVERNMENT DOESNT ALLOW US. The plan must be approved by some expert in Washington. Apparently is for our own good, but we cant understand it.

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    19. @KyleN:

      "Healthcare cannot be a right"

      The absence of healthcare also imposes costs onto others. There's not avoiding imposing costs onto other parties. Externalities abound. If we're going to impose costs, let's at least try to be efficient about it - i.e., *large* pools -> spread risk.

      Regarding Prof. Chocrane's post, it sounds like we might need larger penalties to get the desired outcome, but I think all the hype and discussion about healthcare will actually spur others to seek health insurance.

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  6. I have a sense of deja vu. When Obama was first elected I felt optimistic, but eventually a sense of disappointment set in. Similarly, the first time I read a description of Obamacare, it seemed like a good idea, but now I see that there can be some pretty serious side-effects.

    Some people see Obama as malign. I don't, but I see him as a little too good at persuading people, and a little too optimistic about outcomes.

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    1. Was Lenin malign? After all he just wanted to break a few eggs.

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    2. Godwin's law should be extended to Lenin comparisons

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  7. I'm somewhat astounded sometimes by just how smart consumers are even without economics degrees (presumably). From NBC News just today: "I'm sitting here looking at this, thinking we ought to just pay the fine and just get insurance when we're sick," Schwab added. "Everybody's worried about whether the website works or not, but that's fixable. That's just the tip of the iceberg. This stuff isn't fixable."

    http://investigations.nbcnews.com/_news/2013/10/28/21213547-obama-admin-knew-millions-could-not-keep-their-health-insurance?lite

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  8. You mean "expanded Medicaid," not expanded Medicare, I think. Medicare ends with "e" and is the one for elderly, which begins with "e" is the way I remember it.

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  9. People seem to be missing the point- in the current individual market, one could purchase catastrophic coverage, with, say, a $10k deductible, no maternity care, etc. but be covered if they were in a car accident or got cancer. Not a bad system for those who are infrequent users of health care (and, some may argue, really the way health insurance should be structured to increase patient-driven market forces). From what I've read, now you must purchase a policy that covers all kinds of things you'll never use, still have that really high deductible, and pay anywhere from 3 to 10 times what you were paying before. So instead you pay a fine that is considerably less than those premiums and wait for the catastrophic event to occur before buying insurance, which can't be denied and will cost only community-rated premiums. Easy choice for the young, healthy person.

    A case in point: a few years ago I worked at a small business where a guy in his 20's was hired. After a few months, he was given the option of purchasing health insurance through his employer's plan, but for whatever reason, never bothered to sign up, despite encouragement from his employer. Unfortunately, not long after his lack of action, a gas can exploded not far from him and he was severely burned. Months in the hospital and $400k in health care debt, as he was not eligible for Medicaid or other programs. These are the folks who won't buy health insurance. Under the new rules, some insurance company would have been forced to accept him and his huge debt for basic community-rated premiums, because I'm guessing he still won't sign up now that it's gotten really expensive relative to his maybe-twice-minimum wage rate. That's without even discussing the difficulty of signing up because he doesn't have time to waste on a dysfunctional website. How long will insurance companies be willing to stay in the market when they're saddled with the skewed population compelled by the adverse selection problem?

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    1. I think you are missing the point. In the current system, they can discriminate against you due to pre-existing conditions, so you would quickly lose your coverage if you got cancer

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    2. Pre-existing conditions makes it hard to buy a new policy, it doesn't cause you to lose existing coverage, which is what you've paid for.

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    3. My understanding is, you could have been kicked off your existing plan for pre-existing conditions prior to Obama care, during the yearly renewal process

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    4. Your understanding is incorrect. Since the early 1990s, individual insurance has been "guaranteed renewable" meaning once you sign up you cannot be kicked out for getting sick. Life insurance has been that way forever. Because, duh, people want it. It hasn't been perfect for various regulatory reasons, but buying insurance so you could have it after you got sick used to make a lot of sense. It no longer does.

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    5. You make it sound as if it is currently costless to be without insurance until you get sick. But that is not entirely true. In addition to the penalty, if you buy through the exchange, you can only do it during the enrollment period, which means in between you still have risk. If you buy off the insurer's website, you don't get the tax credit and it doesn't start immediately either, usually it starts on some date. Furthermore, imagine getting into a catastrophic car accident and then trying to fill out the forms for insurance while you are say incapacitated. You probably won't be able to. So, there is still a significant cost to not signing up, which means if you are middle class and can afford insurance with or without subsidies, it seems silly to wait until the last moment

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    6. But if you moved from one state to another state, you would not be able to renew it if you had a pre-existing condition, correct?

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  10. Also a problem of getting the ideal, young ACA "funders" via the parental insurance expansion to age 26 - the very people the ACA needs to sign up as individuals.

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  11. I have been in the business of delivering and servicing group benefits for 30 years. I have never seen companies so nervous, it’s even too the exclusion of all the other benefits including retirement plans. “if we don’t fix this problem the rest won’t matter” this from the owner of a white collar successful 200 employee group who just received his BlueCross ACA letter. It’s incredible some are contemplating closing the doors “why bother” the owners said “we have worked hard all our life and it’s just too easy to retire early and live on the dole”.
    As capitalist we are quickly working with carriers to build bridge policies to make the bronze plan better than the gold while reducing cost. We have discovered several loop holes that allow companies to defer up to 11 months without unionizing! Of course we’re excited and see large dollar signs in our future, It’s probably more the fact that companies have been in a wait and see mode at least now they’re going to get off the fence one way or the other.

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  12. It is very difficult to claim that socialized health care will work in the U.S. because it works in other countries. That is partial equilibrium analysis and cannot be justified in the case of the U.S. economy. I would argue that European health care systems have been paid for by the U.S. indirectly since WWII. One need only look at the share of European GDP devoted to (government provided) health care and defense spending and see that it as about the same as what the U.S. spends on defense alone. That is because the U.S. has (largely) paid for the defense of Europe (and Japan, Taiwan, S Korea, Saudi Arabia, etc.). Now the U.S. is going to have European style health care and support a military that protects the "free" world?* Count me as skeptical.

    * I put free in scare quotes because there are several possible meanings here. The saddest to me though is the ironic one, i.e. not free when governments control so much of our lives. It seems we fought a cold war against a system that we are now rushing headlong to embrace.

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    1. Claiming that it won't work is also partial equilibrium analysis, when you have evidence from elsewhere that it can work. One argument against it is high implicit marginal taxes, etc. - look at scandinavian countries, their overall marginal tax rates and their employment/population ratio for 25-55 year olds, vs. U.S.

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    2. However they are very different nations. Raising rates to that extent in the US would probably not cause revenues to increas enough because of the negative effect upon economic growth, And would make unemployment among the young go even higher. Likewise, we have a huge influx in immigrants. They will continue to place a burden upon social services and especially on emergency medical costs which they use (they cannot be turned away). And after we have immigration reform I have no doubt there will be a tremendous push to include them all in Obamacare.

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    3. Can you please provide any evidence for your claim that U.S. has (largely) paid for the defense of Taiwan? I think US has made tons of money from Taiwan's defense.

      By the way people in Taiwan get high quality health care at much lower cost.

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    4. To add to what @MrMrvincent said, the US got a big indirect benefit from it. By defending several countries the US made sure that communism didn't win the cold war, and it surely benefit from that.
      Also, taking into account the huge levels of Debt that the US has, I would say that China & Japan already paid for your health care ;-)

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  13. One very important thing John left out is that the insurance companies have to spent at least 80% of premium revenue on care. If they spent less, they will have to issue refunds. So if your new premium turns out to be too high, you will get some money back. If not, this is how much health care costs on average. But you will not be ripped off by insurance companies any more.

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  14. For what it's worth, Professor, The penalty increases year-over-year until 2016 where it hits 2.5% of income; the opportunity cost of not having insurance rises. I would be surprised if that penalty didn't further increase. Healthcare cost growth has been slowing. We'll see what happens.

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    1. What will be interesting to see is whether a democratic government will really try to impose a 2.5% tax on income to struggling middle class families who don't buy health insurance. Picture a family living on $90k a year, just above the subsidy line, struggling to put kids to school, pay the mortgage, and so on, and decides they just can't "afford" the $10,000+ per year of after tax dollars that the new spiffy insurance policies cost. Our government is really going to enforce a $2,250 tax penalty on families like that? The IRS has already said it won't go after people who don't pay. It will be interesting to see what happens.

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    2. One man's punishment is another man's incentive.

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  15. enjoyed reading the views over the last few days of obamacare festivities. As a still practicing physician who has survived 40 years in a combination of private practice, medical academia, and large group not for profit settings had to throw out a few opinions:

    I have traveled extensively in Europe, Asia, South America and to a lesser extent Africa, in a professional role, and have no problem understanding why many individuals with the means will come to this country for medical care when challenged with a serious or life threatening illness. I still regularly see international patients who feel they can not get state of the art care from their government run systems. Any one who believes that a top down cost controlled rationed system can provide adequate care has never personally dealt with a serious and expensive illness. (just my personal observation)

    Regarding any "right" to health care, I believe the 13th amendment to the US constitution effectively deals with any one individual having a "right" to the services, labor, expertise, or knowledge of another person. ( please insert physician here, not health care provider which I find demeaning) Market forces will always determine what medical services will be provided at any given rate of compensation. The ACA invites cost controls by the government and only negative incentives for physicians to see patients while simultaneously adding millions of new individuals desiring care.

    Part of the current funding mechanism for post doctoral residency and fellowship training is actually being slashed by the ACA and related policy, which will inevitably decrease the already critical physician shortage for primary care and specialty services in the US further

    I am truly becoming nauseated by the recurring shibboleth regarding the US health care system being ranked near Zimbabwe on "quality" measures. These totally bogus rankings from the UN use apples and oranges comparisons and statistical tricks that have been debunked for the garbage they are for years.

    My observations of the evolution of government help in the practice and delivery of medical care over my career have been that every single intervention since the advent of medicare has led to disastrous increased cost, decreased personal responsibility and access to services and limited choice. An excellent small example is medicare part D which was an expensive solution in search of a problem. Prior to this government help, most beneficiaries had insurance coverage for medications. Those who could not afford meds got them gratis regardless of cost directly from patient assistance programs of the big bad pharmaceutical industry. Federal interference in this arena has restricted and in many cases made illegal, direct to patient pharmaceutical product support. Failure to allow negotiated drug prices has kept these prices artificially high. Implementation of very restrictive formulary rules and prior authorization procedures in an effort to control costs, has restricted access to cutting edge products available for highly prevalent diseases . This misguided policy ultimately drives up costs through the development of totally preventable complications. Just examine the looming disaster of type 2 diabetes which is already consuming about a third of the entire medicare budget.

    I could go on and on, but appreciate the opportunity to vent in this forum

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    1. thanks for the insight -- yup people of means can get excellent healthcare in the isa. those who are sick cannot get any coverage except through healthcare exchanges and other government programs. many exchange policies have help for medication expense as well. if you are not wealthy or healthy the ACA is a blessing. It is to us.

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    2. I truly hope the ACA will be a blessing to you and those who are not wealthy or healthy, but I am not optimistic that it will play out that way. If the government runs true to form, the ACA will turn into Medicaid for all, and not pay enough for medical providers and physicians to even cover their overhead costs. Hence the recent series of medical studies examining health outcomes for medicaid beneficiaries. It turns out that if you have medicaid your health outcomes are worse than if you had no insurance at all, as you still have no access to medical expertise or adequate pharmaceuticals. Outcomes studied were in expensive chronic diseases like diabetes, asthma and chronic lung disease, cancer, cardiovascular disease which are the biggest cost drivers of the entire system. Don't even think about mental health benefits for the 20 percent of the US that has serious mental health issues as these are non existent.

      AS much as I would like to see universal coverage, I have absolutely no faith that the current group of self appointed intelligentsia inside the beltway have the slightest clue how to make this happen.

      Very unfortunate, since viable (in my opinion) options have been circulating for years that are much more likely to work through market driven reforms and realistic useful outcomes reporting.

      Some countries (Switzerland) have even taken this approach and achieved universal coverage, subsidizing those who need help to enter the same market as everyone else, and keeping their percentage of GDP consumed by health care expenditures much lower than ours.

      Oh well

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  16. “For the vast majority of people who have health insurance that works, you can keep it. For the fewer than five percent of Americans who buy insurance on your own, you will be getting a better deal. So anybody peddling the notion that insurers are canceling peoples’ plans without mentioning that almost all the insurers are encouraging people to join better plans with the same carrier and stronger benefits and stronger protections … you’re being grossly misleading. To say the least…It’s no surprise that some of the same folks trying to scare people now are the same folks who have been trying to sink the Affordable Care Act from the beginning. Frankly, I don’t understand it. Providing people with health care should be a no-brainer. Giving people a chance to get health care should be a no-brainer.” - Barak Obama - Boston, Massachusetts, 10/30/13.
    As President Obama suggets, Professor Cochrane's current negative post and others preceding it (and to follow) are no surprise. Somewhere along the line a positive, constructive contribution would truly be welcome.

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    1. Exactly, I've looked at Professor Cochrane alternative ideas and they are based on a dubious assumption that in the age of IT adverse selection is no longer a problem. So, if this idea is false, then ACA is basically the only realistic way to provide 48 million uninsured Americans with insurance

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    2. Which ideas are those? I don't believe that objection applies to his idea of health status insurance.

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  17. If the edifice of the ACA collapses and the program ends up as means for people to get catastrophic costs covered by the government, this result may not be so bad. You would have people paying for all of their own non-catastrophic care which would might lead to some more efficiency for those services, while being protected from many catastrophic costs. In this view, the fines the uninsured pay would be like catastrophic insurance premiums paid to the government. If it weren't for the bans of various types of private insurance, this seems like a pretty good result.

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  18. Health care insurance is probably one of the most worthy investment you will have in your life time, not only for yourself but for your family members as well. But if the system has become this complicated, then it’s like discouraging everyone to get a health insurance. I think the topic of discussion should be focused first on the pros and cons. Our opinion should be solution based and not just to raise a point.

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Comments are welcome. Keep it short, polite, and on topic.

Thanks to a few abusers I am now moderating comments. I welcome thoughtful disagreement. I will block comments with insulting or abusive language. I'm also blocking totally inane comments. Try to make some sense. I am much more likely to allow critical comments if you have the honesty and courage to use your real name.