Alan: By way of overview, it is important to know that the following Wall Street Journal article -- "ObamaCare Arrives: Higher Costs And Fewer Choices" -- states that "The Patient Protection and Affordable Health Act" will generally provide better care "than what individuals and small businesses buy today." It states this fact as if "better care" were somehow despicable. Wasteful perhaps... Notably, "Obamacare Arrives" does not mention the four tiers of coverage from which Americans may choose. This omission makes me think that the Journal's right-wing orientation does not even look at "Bronze Coverage." Who knows? The authors may even be passing over "Silver Coverage." Gold Coverage? Is their only focus "Platinum Coverage?' Egregiously, they don't say. Instead, they prevaricate.
http://paxonbothhouses.blogspot.com/2012/10/prevaricate-from-latin-praevaricari-to.html Nor does the article point out that people with private insurance and employer-facilitated insurance will not be participating in these healthcare "exchanges" which are primarily for people who lack a provident employer or the wherewithal to purchase insurance from one of the traditional profiteering, cut coverage companies like Aetna, Cygna, or Humana. (To close this introduction, I will mention that since Rupert Murdoch bought The Wall Street Journal in 2006, it has been downhill - with ever more deviousness, deceit and decontextualization. "Obamacare Arrives" is no exception.)
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Alan: The subtitle of this article is "Higher costs and fewer choices mean Republicans will have a chance to replace it." The body of the article goes on to say that Obamacare is, at bottom, an expansion of Medicaid, which, like its fraternal twin, Medicare, is significantly less expensive per capita than private insurance.
http://healthaffairs.org/blog/2011/09/20/medicare-is-more-efficient-than-private-insurance/
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ObamaCare Arrives: Higher Costs And Fewer Choices
The Wall Street Journal
The Affordable Care Act opens for business on Tuesday, a testament to liberal perseverance if not wisdom. The plan was dragged across the finish line in 2010 with only Democratic votes but no democratic consensus, and then survived a wave election, an historic constitutional challenge, the 2012 campaign and durable popular opposition.
This half-decade political debate has also been a period of convulsive change for the one-sixth of the economy that the law is supposed to "reform." So ObamaCare's start is a moment to step back from the day-to-day Washington scrum and take stock of American health care as this liberal vision unfolds. (Alan: Obamacare will "roll out" the "same" way Social Security and Medicare did. Initially, conservative alarmism will cloud the horizon, followed by high levels of satisfaction. See "Conservatives Scare More Easily Than Liberals" - http://paxonbothhouses.blogspot.com/2013/07/conservatives-scare-more-easily-than.html)
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October 1 is when enrollment will nominally begin for the exchanges, which are ObamaCare's distribution channels for subsidized insurance. We say nominal because there will be many more delays and technical failures, and the media will measure the relative success of the rollout with the soft bigotry of low expectations. These problems and any other confusion can probably be massaged over time. (Alan: These "problems and any other confusion" will not be massaged over time; they will be resolved and clarified over time.)
Reuters
Some Republicans think ObamaCare will collapse by itself. This is unlikely, and the Health and Human Services Department will use any regulatory means necessary to prop it up. The larger question is whether premiums will be affordable as Mr. Obama promised, or if they'll soar. Given ObamaCare's ambition and complexity, the answer is both, varying by state and person.
The standard benefit mandates are much richer than what individuals and small businesses buy today, and the law's regulations and price controls ensure that coverage will be more expensive. (Alan: "The law's price controls ensure that coverage will be more expensive." Excuse me. Without any documentation here, this statement is absurd. Price controls imposed on a previously unregulated, avaricious system do not make healthcare "more expensive." The fact that more people will be covered -- which was the prime mover of The Affordable Care Act -- may result in a more expensive system overall, but "price controls" will not raise cost. Perhaps WSJ editors could familiarize themselves with "The Straight Face Test.") Coverage will cost about 20% to 30% more on average, and often much more for the younger and healthier who are forced to cross-subsidize more expensive patients. (Alan: Much more than what?!? Obamacare's target clientele does not yet have insurance. If there are less expensive alternatives out there, would "the newly insured" not buy one of the cost-effective alternatives rather than pay more for Obamacare? Or simply "pay the fine" which would be cheaper than both alternatives? Look. Obamacare is not as simple to understand as "single payer." But it is easy enough for anyone who takes fifteen minutes to study a well-written summary. http://useconomy.about.com/od/criticalssues/a/Obamacare-Summary.htm There are four Obamacare coverage levels - Bronze, Silver, Gold and Platinum. So what, prithee, does "standard benefit mandates" mean, and why no reference to the quadruply-tiered pricing/benefit system. Methinks The Journal obfuscates facts to make Obamacare look as expensive as possible. Reprise the Straight Face Test?) This is far from Mr. Obama's promise of a $2,500 per-family discount on premiums. Yet pinning down exact figures is impossible because HHS has disclosed premium details from mere slivers of the population for the 34 exchanges that it will run.
The real measure of ObamaCare will be how many individuals think they're better off. Some of the cost spikes will be offset by subsidies, which will limit premiums for the lower- and middle-income beneficiaries who qualify to about 8% to 10% of after-tax pay. People over 40 and others with chronic conditions may conclude that's a good deal.
But many others won't, especially because ObamaCare coverage will be closer to what insurers call "Medicaid Plus" than normal private insurance. (Alan: Excuse me. "Normal" private insurance? My experience of "normal private insurance" was that "normalcy" never covered as much as I (and my friends) were led to believe. Plus, if we had a pre-existing condition - often whimsically defined - we would be cut out altogether. If "normal private insurance" were defined accurately, it would include reference to "death panels" which were a ubiquitous feature of pay-to-play -- and don't-play-at-all-if-you've-been-sick-before -- "free market" insurance. Aside: Obamacare's guaranteed access to health insurance, despite pre-existing conditions, will immediately disappear if The Affordable Care Act is repealed. Despite common assumption, it is just not cost-effective to guarantee coverage, as Obamacare does, unless insurers are able to sell policies to healthy young people who would be reluctant to "buy in" without the "individual mandate." I should mention that RomenyCare in Massachusetts -- the template for Obamacare -- is much to the liking of residents. Read up on RomneyCare at http://mittromneycentral.com/resources/romneycare/) The exchanges are really a marketplace for political competition, and insurers know their real customer is government. HHS and state insurance commissioners demanded the cheapest price points that the mandates and regulations would economically allow. (Alan: So... When government drives a hard bargain and actually gets a good deal rather than spreading "golden parachutes" and meting out stratospheric salaries, the editorial staff at WSJ gets upset. What's the matter boys? Finally being cut out of your cushy healthcare deals -- the same ones you designed to enrich executives and screw patients?)
The result is networks of physicians and hospitals that are very narrow and restrict patient choices in return for discounts. (Alan: Americans are drunk on "choice" which they consider a panacea despite The Evident Tyranny Of False Alternatives. Look. The purpose of "healthcare exchanges" is to provide good care -- with lots of preventive care! -- rather than provide an endless smorgasbord of questionable value in the first place.) Forget about seeing that specialist, and queue up at the community hospital. (Alan: No, you won't have to "forget about seeing specialists." As for seeing "that" one-and-only specialist, it rarely happens anyhow. Like every other professional, medical specialists have limited patient loads so that few individuals get to see the most lionized specialists in any system.) The government franchises that contract to run Medicaid and other health programs for the poor are simply expanding to a new group of beneficiaries. There's nothing wrong with tight networks per se for people who prefer that trade-off, though the lack of an alternative on the exchanges does demolish Mr. Obama's frequent pledge that if you like your doctor you can keep your doctor. (Alan: Obama was talking about people who already have a doctor which means they already have a healthcare plan and thus circumvent the exchanges in the first place. President Obama is not breaking any pledge. If you already have a doctor with your existing health insurance, no one is going to violate that compact.)
Most national insurers except for the Blue Crosses and Blue Shields have sat out this exercise and are planning trial runs in only a few states, waiting to see how the exchanges mature in practice. Many of them pulled out of states amid regulatory abuse, and some are marketing their own policies as better than the exchange, despite the lack of subsidies. (Alan: The last 50 years of private insurance dominance have demonstrated - beyond shadow of doubt - that just because private insurers are "marketing their own policies as better," does not mean they are better. Usually, it means the profiteers sling a "better" load. Private insurance companies deserve their reputation as untrustworthy sonsofbitches who would rather see people dead than cut their profits. That The Wall Street Journal fails to acknowledge this obvious fact is a measure of their duplicitous contemptibility. If you have not seen Michael Moore's "Sicko," please do. It comes as a surprise to many people that Moore's healthcare documentary was widely praised by conservative reviewers. "Sicko" is freely streamable at http://paxonbothhouses.blogspot.com/2013/10/sicko-michael-moores-healthcare.html Here's Sicko's "trailer" - http://www.youtube.com/watch?v=7dOgfObb3O4 The scene in which an American carpenter and a Canadian carpenter "navigate" their respective healthcare systems after the amputation of multiple fingers is extraordinary. You will remember these vignettes on your deathbed.) What an irony it is that the industry that first lobbied for ObamaCare to increase its market share is now unhappy with the result.
The larger story is that ObamaCare is gradually splitting U.S. health care into a two-tier system. (Alan: U.S. healthcare has been a two-tier system ever since Medicare, Medicaid and Veterans Administration were founded. What is new in is that people previously excluded from "the government tier" are now being included. The "inconvenient truth" is that American conservatives would rather "the n'er-do-wells die" than be covered by the state. I say "A pox on the murderous lot!") One tier will be insurance that depends on direct government subsidies and controls—Medicaid, Medicare and the Medicaid Plus of ObamaCare's exchanges. This care will be constrained over time by how much the public is willing to be taxed. (Alan: Grown-ups understand that Life comes with restraints. To proclaim this fact is no more meaningful that to say "water is wet" or "oil is slippery." That said, nothing is as slippery as cowboy capitalists trying to keep their cornered markets. Sorry guys. New rules. New game. No more pigging out at the unregulated trough.)
The other tier will be the 156 million Americans who now have private coverage through their jobs, though ObamaCare is changing that too. One consequence has been a boom in part-time employment to avoid the law's penalties, especially in low-wage and seasonal industries, and larger and more stable employers are also re-evaluating traditional worker benefits. (Alan: If so, it will only move us toward comprehensive state-sponsored healthcare faster. Notably, comprehensive state-sponsored healthcare -- such as they have in all other developed countries -- is very high quality with per capita costs about half what we are here in The Pork Bowl. Sorry guys. New rules. New game. No more pigging out at the unregulated trough. Is there an echo in here?)
High and rising health costs long predate ObamaCare, and while they've slowed in recent years—though still not enough to keep pace with wage growth—the Affordable Care Act will accelerate them. One reason will be the new taxes on insurers, drug companies and device makers that will be passed on to consumers. (Alan: In any dynamic system there will be changes that pinch the balloon "here" and expand the balloon "there." That said, here' is The Bottom Line. Obamacare is going to cost less, per capita, than healthcare would have cost under the self-indulgent "free market" system that for decades excluded tens of millions of Americans altogether and grossly undercovered tens of millions of others, while providing inferior health outcomes at astronomically high cost.
http://paxonbothhouses.blogspot.com/2013/03/national-geographic-chart-of-per-capita.html)
http://paxonbothhouses.blogspot.com/2013/03/national-geographic-chart-of-per-capita.html)
Another is the wave of medical industry consolidation as a defense against political and regulatory risk. Hospitals are merging into huge regional health systems and also buying up physician practices with doctors as salaried employees. These quasi-monopolies gain the power to mark up prices, which will increase as government reimbursements fall. (Alan: Obamacare puts "collective government control" in the driver seat. If the so-called "consolidators" mark up prices, government will put them in their place. After all, once Obamacare gets rolling, Canadian-style Single Payer -- already popular in Vermont, http://paxonbothhouses.blogspot.com/2013/09/home-who-we-are-what-is-single-payer.html -- is going to look better and better. So, what do you say "consolidators?" Are you going to keep cost-and-price under control? Or, do you want "the people" and their elected representatives -- increasingly Democratic as minorities become more numerous -- to enact Single Payer? It's your choice. Just let us know which you prefer. Either way, we're happy to oblige?)
In response, many businesses are turning to the growing trend of private exchanges among insurers and third-party benefits administrators. They'll pay a defined amount for employees, who will be able to choose the plans that work best for them, much like the 1980s-era shift to 401(k)s from pensions. (Alan: Sounds like an excellent, market-driven initiative! Good work Obamacare! Maybe the private sector is still capable of doing something without first applying K-Y jelly to patients' hind sides.)
Companies like IBM IBM -0.93% and GE have done this with their retirees, and Walgreens has moved its active workforce. This is a healthy development to the extent it encourages competition and allows workers to get bigger wage increases. The management consultants at Accenture estimate that 18% of workers will be on a private exchange within four years—more than will be enrolled in ObamaCare.
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As they always do, liberals will try to fix the problems created by ObamaCare regulation with more regulation, and they'll try to prevent two-tier medicine by requiring, say, all doctors and hospitals to accept government-backed insurance as a condition of licensure. They'll also try to crush private exchanges by stuffing many more people into ObamaCare, such as state and local government workers. (Alan: The unspoken pretense in this speculation is that "liberal government programs" are problematic. The fact of the matter is this: There was never -- ever -- a "free" market as problematic as the private healthcare industry, long operated by rip-off artists who pocketed the money that should have been used for life-saving patient care as Obamacare now obliges. "Insurance companies are required to spend at least 80–85% of premium dollars on health costs and claims instead of administrative costs and profits, and rebates must be issued to policyholders if this is violated." http://en.wikipedia.org/wiki/Patient_Protection_and_Affordable_Care_Act)
The good news is that the Affordable Care Act's choppy implementation—and the rise of a real private alternative—means there is still a chance to substantially change or replace it. The unflagging intensity of public opposition has surprised Democrats and Republicans alike. All of that was supposed to vanish with "free" health care. That hasn't happened, and the debate doesn't end when the exchanges open. By making medicine a subsidiary of Washington, Democrats ensured that the debate is only beginning. (Alan: So... The Wall Street Journal concludes its evaluation of The Patient Protection and Affordable Health Act by admitting that Obamacare has prompted enough marketplace competition that we now see "the rise of a real private alternative." Imagine! Obamacare finally built a fire under the lazy, profiteering, death-panel scam artists who ran "the free (for all) market." Let's hear another round of applause for The Patient Protection and Affordable Healthcare Act!
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