Later On

A blog written for those whose interests more or less match mine.

Helping Russ Douthat explain the ACA

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Russ Douthat has a cautionary column in the NY Times today in which he discusses whether the Affordable Care Act, once is up and running, will turn out to be popular and a good deal. He does show that some very inexpensive plans have some huge gaping loopholes that make the plans not such a good deal, but he also omits some relevant information. Andrew Sprung has a good post at Xpostfactoid that adds more information. From Sprung’s post:

  • Those cheap 2013 plans have already been improved by the ACA. The law bans lifetime coverage caps and has already severely constrained annual coverage caps, which are completely banned as of Jan. 1, 2014. In 2013, they could not be lower than $2 million for the year.  Pre-ACA, many plans on the individual market did not even offer real catastrophic coverage, which Douthat suggests might be a preferable alternative for many.  Also, the ACA has banned the wanton use of policy rescissions imposed on the flimsiest of pretexts, a notorious industry practice pre-ACA.
  • The ACA does offer bare-bones catastrophic plans to adults under 30 and others exempt from the individual mandate, e.g., those who can show that buying plans on the exchanges would impose financial hardship. Such plans are not eligible for coverage subsidies, however. Conservatives could plausibly argue that that’s a mistake and, in a sane political environment, attempt to fix it.
  • Granting in full that prices for medical treatment are “opaque, arbitrary and inflated,” Douthat, like most conservatives, would happily delegate the burden of imposing consumer discipline to less wealthy Americans, who are likely to “reduce healthcare costs” by denying themselves essential or preventive care.  Nor does he address the impossibility of individuals doing effective comparison shopping or cost-benefit analyses in the current insanely opaque market, where you can’t get price estimates if you try. It’s true that insurers can in some instances create conditions in which plan members have the information they need to comparison shop, and reasonable incentives to choose reasonably priced providers. But the kind of unregulated insurance market that conservatives favor won’t encourage such arrangements.  Moreover, the ACA lowest-level “bronze” plans only cover an estimated 60% of members’ likely medical costs and can have deductibles as high as $6350 for an individual. Coverage at that level (or the silver plans’ 70% coverage, for that matter) hardly encourages frivolous use of medical services.
  • With regard to public sector priorities “undercut by rising health care costs”: the ACA pays for itself, with an array of taxes on industry providers and the wealthiest Americans and Medicare payment cuts and reforms. The CBO projects that it will reducethe federal budget deficit, modestly in the first ten years, far more dramatically in the next ten.  The package of pilot payment reforms, including performance incentives for hospitals and accountable care organizations, represents the most serious government attempt to date to contain healthcare inflation. If enough of those pilot programs prove successful, or if any are successful enough, they will do more to secure the nation’s long-term fiscal health and free up money for other priorities than all the Republicans’ favored entitlement cuts combined.

Written by Leisureguy

27 October 2013 at 10:27 am

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