Man, you're brilliant. Thanks for teaching us how insurance works. I never knew.
We have had shared risk pools forever. We have also had policies that catered to the needs of certain groups. My 26 year-old daughter in vet school had a policy through the AVMA where she could either chose or deny maternity coverage, with a healthy rate increase if she elected it. She denied it, and had a monthly premium in the $165 range. That policy has been cancelled effective 12/31/13. She now has to go to an exchange, where such choice is no longer open to her.
Let's play a guessing game: will her premium be (a) lower, or (b) higher than what she was paying?
Student health insurance policies have always been great deals because they were based on the actuarial of that particular risk pool.
When I first started college, my health insurance plan cost me, I believe, $12.00/month. It paid in full for services at the campus clinic or a few of the local hospitals; or for emergency care anywhere, but with the customary co-pays. The policy was co-branded by a well-known insurance company (Travelers, I think, but I wouldn't swear to it) and covered me whether school was in or out of session.
Those policies, I am sure, will be no more under Obamacare; and college-aged young people will be the cohort that is most royally screwed by the ACA.
If they even bother with insurance, which I believe is both unlikely and a poor financial decision for them, college kids won't be paying $12.00 a month anymore, nor even $165.00 a month. Their policies will also have such high deductibles, co-pays, and out-of-pocket expenses that the vast majority of them will literally be paying for nothing. The costs for their infrequent use of health care won't even come close to meeting their deductibles, so they will pay through the nose for insurance, and then wind up paying for everything out-of-pocket anyway.
Which brings me to another thing, in fact, the thing about the ACA that bothers me the most.
A few people here know me IRL, or have at least met me once or twice. Most of these people will affirm that despite some of my diatribe, I actually care deeply about the poor.
You see, I was raised poor, and as an adult I started out poor. When I was poor, even coming up with money for food, or gas to get to work, was a challenge -- and gas was cheap back then.
Whether I'd be able to pay the rent every month was a coin-toss. Utility bills were the same. I sometimes had to resort to the old trick of mailing the check for the phone bill to the electric company, the check for the electric bill to the phone company, and so forth. The "mistake" bought me a little extra time so I could get another paycheck under my belt.
My mother used to tell me that a dollar was a lot of money if you needed a dollar and didn't have it. She was right, too.
In short, I know what it's like to be poor. I also have great compassion for poor people, and once I was no longer poor, I performed a great deal of volunteer work among still-poor people.
Having been poor, and having worked among the poor, I know for a fact that poor people will gravitate to the "bronze" level policies because, well, they have no money. So even with the subsidies, they'll try to minimize their premium payments. If they can get a "bronze" policy for little or nothing after the subsidy, then that's what they're going to do.
The problem is that poor people simply can't afford the kind of out-of-pocket costs associated with the lower-level plans available under Obamacare. For the poor, a difference of a few bucks a month is huge because they simply don't have the few bucks; so even with the insurance, they still won't be able to afford medical care.
So when all is said and done, under Obamacare, the poor will still be in the same boat they're in now. Because of the high deductibles, co-pays, and out-of-pocket expenses associated with the only plans they can afford, they still won't be able to afford health care. They and/or the taxpayers will be paying for health insurance that they can't afford to use.
That's why even more so than the inherent unfairness of requiring people to pay for care they can't possibly ever need (like maternity coverage for males or post-menopausal women, as an example), the thing about Obamacare that bothers me the most is the sheer stupidity of it.
I don't even mind the subsidies, to tell you the truth. I don't object to helping the poor. I would rather it be done through some channel other than the government, whose record of efficiency is less-than-wonderful; but hey, not everything has to be to my liking. If it works, I can live with it.
What I mind is that, in the end, this law is going to increase health care costs for almost everyone, disincentivize quality medicine, create yet another maze of government bureaucracies on both the federal and state levels, and consume ponderous amounts of tax revenue -- while doing absolutely nothing -- NOTHING -- do make health care more accessible to poor and working-class people.
The more I look at it, in fact, the more it becomes clear that the ACA is the poster child for legislative stupidity. It's hard to find anything smart about it. It's just a staggering, steaming pile of
**** sheer stupidity.
The saddest thing of all is that it could have been done right. I know I sound like a broken record, but the truth is that there existed effective, successful models for how to do it right. As I mentioned in a previous post, New York's HealthyNY program (soon to be another casualty of Obamacare, by the way) was the example I'm most familiar with.
By way of a quick recap, HealthyNY consisted of a streamlined, basic and major medical plan, with prescription drug coverage, and very low deductibles and co-pays. Any licensed insurer could offer it to any applicant who met the income guidelines. The insurers themselves were responsible for vetting and certifying applicants, so there was little taxpayer expense.
The coverage wasn't broad, but it was very deep. It wouldn't pay for your yoga lessons or your gym membership, but it would pay for your quadruple bypass or your cancer treatment. In short, it provided excellent coverage for the vast majority of people's medical needs, but practically no coverage for anything else.
That's what the ACA should have been looking at as "bronze" level plan: just basic and major medical care, with affordable deductibles and co-pays. That's what the vast majority of people need.
The higher "metals" should have been based on broader coverage rather than lower deductibles and co-pays (although those could also have been elected). The higher-level plans would be optional for all income groups. In other words, wealthy people would also be able to select just the basic / major medical "bronze" plan if that's what they wanted.
I would even throw in another idea for the poor. Bear with me, because this is a bit complex. But it's also brilliant, even if I do say so myself.
Every "bronze" level plan, which would be limited to basic, major medical, and prescription drugs, would also come with an HSA account at any financial institution that agreed to certain requirements. The main requirement would be that there be no maintenance fees on the HSA. The subscriber's policy premiums would include a small amount every month that would be deposited into the HSA until it was funded to the level of the policy's deductible.
The HSA would also include an initial credit line equal to the difference between the HSA balance and the remaining deductible in a given calender year. The credit would be available if a subscriber had a major medical expense that exceeded their HSA balance and whatever cash they could afford at the time of treatment. The credit line would be backed by the federal government, which would have the ability to collect it from the subscriber in the event of default.
With a system such as this, every poor family could afford basic and major medical coverage, which would satisfy
all of the medical needs of the vast majority of families. More importantly, however, they would
never have to delay care because they had no cash in their pockets. The medical credit line would be available, allowing them to pay in installments for unexpected emergencies; and the HSA balance, in most cases, would be sufficient to cover routine co-pays after a few months.
Most Liberals, of course, would hate this idea because wealthier people would have the option of buying broader coverage than poor people could afford. Liberals have this insistence that everyone be treated the same, even if it makes no sense whatsoever in a given context.
In this context, Liberal thinking has resulted in a system so completely ass-backwards that it defies logic. The plans that have the lowest out-of-pocket expenses are so expensive that they're available only to the wealthy; and the only plans the poor can afford have such high out-of-pocket expenses that even with the insurance, the poor will still not be able to see a doctor when they get sick.
Someone please explain to me how that makes sense.
This whole issue frustrates me because believe me, I'm far from the sharpest knife in the drawer, yet even I am astounded by the sheer stupidity of the Obamacare model. It could have been done well, and the models were already there. But politics got in the way, leaving the poor out in the cold in the process.
-Rich
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. And if you take advantage of your free gender reassignment surgery, you can take advantage of the maternity care benefits.
