In my last post, I asked, "But what if most of the uninsured literally don't buy Obamacare?"
"Only 11% of consumers who bought new coverage under the law were previously uninsured," according to a survey of 4,563 consumers eligible for the health insurance exchanges done by McKinsey & Company and reported in Saturday's Wall Street Journal.
The Journal reports that "insurers, brokers, and consultants estimate at least two-thirds" of the 2.2 million people who have so far signed up in the new exchanges are coming from those who already had coverage.
This is consistent with anecdotal reports from insurers I have talked to that are seeing very little net growth in their overall individual and small group markets as of January 1.
That's even worse than I thought it would be even considering the January 1 individual policy cancellations and small group renewals that are driving employers to reconsider offering coverage––and that is saying something. The vast majority of the individual cancellations, particularly because of the early renewal and extension programs, are yet to come. The same can be said for the small group renewals.
This also tells us why the first three months of the Obamacare enrollment had a relatively high average age––they came from the same market that tended to skew older that the health plans already covered.
When McKinsey asked why subsidy eligible people weren't buying, 52% cited affordability as the reason. Readers of this blog will know that I'm not shocked to hear that given what I have been writing about the high after-tax premiums, net of the subsidies, people are finding, as well as the high deductibles and narrow provider networks the subsidized Silver and lowest cost Bronze exchange plans are offering people.
Another 30% cited "technical challenges" with the website as reasons they have not yet bought. That said, enrollment in the state exchanges that have generally been running well––California, Washington state, New York, Connecticut, Kentucky, and Colorado are also only enrolling a very small number of people relative to the number of policy cancellations in their markets and the size of their uninsured population.
Private exchange Health Markets reports that of the 7,500 people it has enrolled, 65% had prior coverage.
At Michigan's Priority Health about 25% of their new exchange customers came over from employer coverage and 50% from the individual market––leaving only 25% to come from the ranks of the uninsured.
I will suggest that the significant number of the new enrollees coming over from discontinued employer coverage should be troubling to Democrats. While low paid workers might fare better in the exchanges, many of those eligible for federal subsidies, particularly in two-income families, will fare far worse compared to the plan their employer offered them. Creating a circumstance that forces people to lose their employer coverage is not going to be a political win.
The WSJ also reported that Michigan insurers expected a total of 400,000 new exchange enrollments out of the 1.2 million uninsured but so far have signed-up only 76,000 people, "many of whom were previously insured."
If this keeps up there won't be a "death spiral." Heck, so far the insurers are just re-enrolling their old customers at higher rates!
In addition, many of the 2.2 million exchange enrollees have not yet paid their premiums. The carriers I talked to at the end of last week report that anywhere from a low of 70% to a high of 85% of new enrollees have paid so far. Some of the health plans have closed their books on January and some are willing to take premium until the end of the month. It would appear there will be an overall 10% to 20% simpulan attrition rate due to non-payment of premium.
However many finally pay, so far it is clear that the uninsured just aren't buying Obamacare.
If this continues, people will be asking a very big question come election day:
While we needed to do health insurance reform, why did we have to do it in a way that so disrupted the existing individual and small group market if the people it was supposed to benefit, the uninsured, weren't going to buying it?
The Obama administration will now argue they had lots of computer problems between October and January and there are three months remaining to get people interested in and purchasing health insurance.
They are right.
But when the spin is over, they have to be sweating bullets.
Earlier post:
Obamacare: To Buy Or Not To Buy–––An Entrepreneur Would Have Done It Differently
Selasa, 02 Oktober 2018
The Republican Alternative To Obamacare––Their Aversion To Fixing It May Prove To Be A Political Mistake
The Republicans have an alternative to Obamacare and they may have given the Democrats a big political gift.
The proposal was unveiled last Monday by Republican Senators Richard Burr, (NC), Tom Coburn (OK), and Orrin Hatch (UT).
The Republican plan targets many of the most unpopular parts of the Affordable Care Act such as expensive mandated benefits and the resulting lack of choice, the individual mandate, the employer mandate, and age-rating disruptions.
My sense is that most independent voters––the ones that matter in an election-year––don't want Obamacare repealed; they want it fixed.
The masalah for Republicans is that they have such a visceral response to the term "Obamacare" that they just can't bring themselves to fix it. The notion that Obamacare might be fixed and allowed to continue as part of an Obama legacy and as a Democratic accomplishment is something they can't get past.
So, the only way Republicans can propose an alternative to Obamacare is to first wipe the health insurance reform slate clean and start over.
There is a masalah with that strategy. Have you heard the one about, "If you like your health insurance you can keep it?"
It is now 2014. The Affordable Care Act is law. The Republican alternative would mean taking lots of things away the Democrats will quickly pounce on:
No one has been more critical than me, for example, toward Democrats who refused to phase-in age rating compression rather than shock the market all in one year. But, it's done. Rolling key provisions of the Affordable Care Act back would only create a new set of offended parties who would want to keep the insurance they have.
This sets up an incredible political irony.
By not being willing to fix Obamacare, the Republicans have put themselves in the position of having to take things away from people––many of them from solid middle class people.
That opens up a huge political opportunity for the Democrats.
Democrats can now claim the high political ground by admitting they made mistakes and they are now willing to fix the things that are so obviously wrong with Obamacare. They no longer have to defend it. They become the, "Don't throw the baby out with the bathwater," team. Democrats can now be critical about the most unpopular parts of Obamacare because they are the ones willing to fix them!
It is now the Republicans, the Democrats will argue, who would put the country through another round of health insurance disruption.
Of course, Republicans will claim that Obamacare can't be fixed.
But tell that to the older people who Democrats will be quick to remind will be paying more, the middle class people who would get their health insurance subsidies cut, and the 160 million people who get their health insurance––which the really like––through employer-based plans and will see their taxes go up.
I am convinced Obamacare will have to be fixed. It is a mess as it is.
But it will limp along for at least a few years; the health plan "reinsurance" provisions of the Affordable Care Act will assure that.
Even if the Republicans win the Senate this fall, as long as Barack Obama is in the White House there will not be a repeal of Obamacare.
The first real crack the Republicans will have at repealing and replacing Obamacare would be in 2017––IF they sweep the Congress and the White House in 2016. By then this law will be even more entrenched.
I doubt Republicans will ever have the 60 Senate votes they would need for a unilateral remaking of Obamacare. That means any fix will have to come from a bipartisan agreement at some level. A bipartisan agreement would give both sides the political cover they would need for the controversial but mendasar improvements Obamacare needs.
I really believe we will ultimately see a bipartisan agreement to fix Obamacare––most likely after the 2016 elections––that ironically could well include many of the things these Republicans are talking about like caps on health plan tax exclusions, an alternative to the individual mandate, far more flexibility in plan choices, more Medicaid flexibility and accountability for states, and maybe even real medical malpractice reform built upon ideas like "health courts."
But by putting a repeal and replace plan on the table, rather than focusing on a fix from the point we are at today that creates obvious losers, Republicans may have handed the Democrats a big political gift.
I can't disagree with those who argue that all sides have a responsibility to tell us what they would do.
But I will suggest the Republicans would have been better off starting from the place we are at in 2014. About the only thing they will now end up doing is wasting some good ideas.
The proposal was unveiled last Monday by Republican Senators Richard Burr, (NC), Tom Coburn (OK), and Orrin Hatch (UT).
The Republican plan targets many of the most unpopular parts of the Affordable Care Act such as expensive mandated benefits and the resulting lack of choice, the individual mandate, the employer mandate, and age-rating disruptions.
My sense is that most independent voters––the ones that matter in an election-year––don't want Obamacare repealed; they want it fixed.
The masalah for Republicans is that they have such a visceral response to the term "Obamacare" that they just can't bring themselves to fix it. The notion that Obamacare might be fixed and allowed to continue as part of an Obama legacy and as a Democratic accomplishment is something they can't get past.
So, the only way Republicans can propose an alternative to Obamacare is to first wipe the health insurance reform slate clean and start over.
There is a masalah with that strategy. Have you heard the one about, "If you like your health insurance you can keep it?"
It is now 2014. The Affordable Care Act is law. The Republican alternative would mean taking lots of things away the Democrats will quickly pounce on:
- Medicaid Expansion - The Republican alternative would "not expand" Medicaid––presumably rolling back the Medicaid expansion in each of the 24 states that have expanded it. By year-end, millions of Americans will have gained coverage. Who wants to tell these people now on Medicaid the Republican alternative only contemplates covering pregnant women, low-income children, and low-income families at the old levels? Twenty-four states that would see benefit cuts equates to 48 U.S. Senators.
- Insurance Subsidies - The Republican alternative would offer health insurance premium subsidies for people up to 300% of the poverty level. Far fewer people than expected are buying Obamacare but that number will be well into the millions before long. Obamacare offers subsidies up to 400% of the poverty level meaning that lots of people would lose their subsidies––and they would be the voters who are solidly middle-class.
- The Tax Exclusion for Employer-Based Health Insurance - There is no health insurance policy so sacred in America as the one a worker gets from their employer. The Republican alternative would cap the tax exclusion, currently at 100% of whatever the employer gives the worker and their family for health insurance, at 65% of the cost of the "average" cost of a policy. Democrats will quickly jump on this as a huge middle class tax increase and an attempt to undermine employer-based health insurance.
- Lower Premiums for Older People - A controversial part of Obamacare was its requirement that older people can't be charged more than three times the premium of the youngest. That contributed to the rate shock that hit many people in the small group and individual market when Obamacare policies had to comply. Republicans would take people through the same political nightmare once again but in reverse this time. Their plan would cap rating differences at 5:1, thereby forcing older peoples' premiums up, and younger peoples' premiums down. Older people tend to vote more often. Ironically, they have also been the ones who so far have more often bought an Obamacare compliant policy.
- The Prohibition of Pre-Existing Condition Provisions - As of January 1, 2014, there is no such thing in America any longer. But Republicans would bring the provision back if people did not maintain continuous coverage. That sounds fair. But what happens when someone is forced to drop their expensive coverage when they lose their job for a few months and the Republican tax credits don't give them enough help maintaining it? Democrats will be able to think of lots of scenarios where a family playing by the rules has no choice but to drop coverage and face pre-existing condition provisions once again.
No one has been more critical than me, for example, toward Democrats who refused to phase-in age rating compression rather than shock the market all in one year. But, it's done. Rolling key provisions of the Affordable Care Act back would only create a new set of offended parties who would want to keep the insurance they have.
This sets up an incredible political irony.
By not being willing to fix Obamacare, the Republicans have put themselves in the position of having to take things away from people––many of them from solid middle class people.
That opens up a huge political opportunity for the Democrats.
Democrats can now claim the high political ground by admitting they made mistakes and they are now willing to fix the things that are so obviously wrong with Obamacare. They no longer have to defend it. They become the, "Don't throw the baby out with the bathwater," team. Democrats can now be critical about the most unpopular parts of Obamacare because they are the ones willing to fix them!
It is now the Republicans, the Democrats will argue, who would put the country through another round of health insurance disruption.
Of course, Republicans will claim that Obamacare can't be fixed.
But tell that to the older people who Democrats will be quick to remind will be paying more, the middle class people who would get their health insurance subsidies cut, and the 160 million people who get their health insurance––which the really like––through employer-based plans and will see their taxes go up.
I am convinced Obamacare will have to be fixed. It is a mess as it is.
But it will limp along for at least a few years; the health plan "reinsurance" provisions of the Affordable Care Act will assure that.
Even if the Republicans win the Senate this fall, as long as Barack Obama is in the White House there will not be a repeal of Obamacare.
The first real crack the Republicans will have at repealing and replacing Obamacare would be in 2017––IF they sweep the Congress and the White House in 2016. By then this law will be even more entrenched.
I doubt Republicans will ever have the 60 Senate votes they would need for a unilateral remaking of Obamacare. That means any fix will have to come from a bipartisan agreement at some level. A bipartisan agreement would give both sides the political cover they would need for the controversial but mendasar improvements Obamacare needs.
I really believe we will ultimately see a bipartisan agreement to fix Obamacare––most likely after the 2016 elections––that ironically could well include many of the things these Republicans are talking about like caps on health plan tax exclusions, an alternative to the individual mandate, far more flexibility in plan choices, more Medicaid flexibility and accountability for states, and maybe even real medical malpractice reform built upon ideas like "health courts."
But by putting a repeal and replace plan on the table, rather than focusing on a fix from the point we are at today that creates obvious losers, Republicans may have handed the Democrats a big political gift.
I can't disagree with those who argue that all sides have a responsibility to tell us what they would do.
But I will suggest the Republicans would have been better off starting from the place we are at in 2014. About the only thing they will now end up doing is wasting some good ideas.