Sunday, September 22, 2013

Reflections on Obamacare

Well, we will see the Republicans are able to seize the government and/or debt ceiling hostage and stop Obamacare.  And if they fail, we will see if the desperate hostility they have managed to whip up survives that actual thing.  Speaking for me, I am confident that if it survives these next few months, Obamacare will be neither as good as is advocates hope nor as bad as its opponents fear.

One thing I do thing, though, is that our side is mistaken in mocking Republicans for thinking simultaneously that the whole thing will be a disaster, and that it will be irreversible once in place.  Those things are not as incompatible as some people think.  Let us consider some things that may (and probably will) realistically go wrong and why they need not lead to pressure for repeal.

Despite Subsidies, Insurance is a Serious Burden for Many People.
Looking, for instance, at Kentucky's kynect, this will probably be a serious problem.  A family of four making $32,500 or less will be eligible for Medicaid, for free.  Great!  But a family of four making $48,000 a year, a mere $16,000 more, will have to pay $252 per month, and a family of four making $80,000 a year will not be eligible for subsidies at all and will have to pay an estimated $634.  Those can be serious burdens! People who cannot afford them and will have to pay a fine for not having insurance will be angry and resentful and no doubt want to system to go away.  They will have to be balanced against the people who are able to afford insurance on the exchanges and will react very badly to having it taken away.  Keep in mind also that people toward the upper end of the spectrum are more likely to have alternatives to the exchanges and, if these other alternative are no better, the exchanges will leave them no worse off.  This may lead to pressure to change the system, either to raise subsidies (not possible in today's political climate) or to end the mandate.  Stay tuned.

People Cannot Afford the Out-of-Pocket Expenses.
Looking that the New Mexico site this time, it gives a maximum annual out-of-pocket of $6,350.  This is essentially the same regardless of the plan one chooses.  Thus a person with a high deductible and copay and one with a low deductible and copay who have a serious medical emergency will be stuck with the same total out-of-pocket.  But people requiring treatment only for minor illnesses and injuries will pay less in deductibles and copays.  Granted, again, one has to ask how this compares with existing insurance plans.  (I don't know).  One also has to compare it with having no insurance at all.  But I suspect that a lot of people who have a serious medical problem might prefer to run up a bill for tens or even hundreds of thousands of dollars that one of $6,350.  A bill that large will not be paid and everyone knows it.  It can be written off in bankruptcy or paid by the county indigent fund.  A bill for $6,350, by contrast, might be realistically payable. Once again, any call for lower out-of-pocket will go nowhere in today's political climate.  But the number of people hitting their annual limit will be a minority in any year.  Many more people will have only routine care and experience the joy of having it covered and having to pay only a manageable amount.  Better still, routine preventive care, X-rays and labs will be free.  Now, that will be popular!

Longer Wait Times; Overload of the Primary Care System.
We know that in Massachusetts, a state with a relatively low rate of uninsured to begin with, there was no serious problem for people with really serious illness, because the system was already set up to pay for them. But the primary care system was overloaded.  That problem will presumably be worse in states with high numbers of uninsured. Indeed, this makes it not altogether irrational for states with high rates of uninsured to be the ones that resist the expansion the most -- they will be the ones with the worse system overload.  It is hard to say what will happen.  At the same time, in the four years since Obamacare passed, there has been some expansion and adaptation of the healthcare system.  Healthcare has been one of the fastest growing source of jobs.  I note again that in New Mexico, the system charges $20 to $30 for visits to a primary care doctor, $50 for a visit to an urgent care, and $250 for a visit to the emergency room.  Clearly, the system is set up to encourage getting a primary care doctor and to discourage treating the ER that way.  Waiting times to see a primary care doctor are already too long to make them a reasonable option for any acute illness. Primary doctors are for routine and preventive care, or for chronic problems that can wait.  Going by the experience of Massachusetts, they will probably be so overwhelmed as to be effectively inaccessible.  On the other hand, if Obamacare brings urgent care facilities within the reach of more people so they can go to urgent cares instead of to the ER, that will be entirely to the good.  (And really, who would choose the ER over urgent care if it were a serious option).  My guess is the Obamacare will accelerate the decline of primary doctors in favor of urgent care and lengthen waiting times at urgent care, while reducing the use of the emergency room.  It will also no doubt lengthen wait times for labs and X-rays.  None of these will be popular.  But whether they are so unpopular as to outweigh people's resistance to having their insurance taken away will be a different matter.

People Find the Exchanges Confusing and Difficult to Navigate.
Conservatives speak of the exchanges with a horror liberals usually reserve for Guantanamo.  To hear them describe exchanges, one would think they were some sort institution behind closed doors where unspeakable acts of abuse occur.  What a disappointment it will be to learn that they are simply websites for buying insurance, and perfectly good insurance at that.  That being said, many people are not tech savvy enough to navigate the sites, and will no doubt find the array of choices baffling and overwhelming.  Nonetheless, there will be site navigators and insurance agents there to help, though how helpful will depend on on whether the state wants the system to work or not.  And I have to believe that what will matter most to most people is their health insurance -- if it provides for their medical needs, it will be worth the hassle.  People unwilling to face the hassle with have to pay the penalty for being uninsured.  But I am guessing they will be more apathetic and defeated types than militant activists.

Employers Drop Coverage.
This is in some ways the biggie.  Republicans have found nothing so effective in stirring up opposition that in warning that all employers will drop their coverage and people will be exposed to the horror and abuse of the exchanges.  Democrats, in turn, said that nothing would change with employer-based coverage.  Neither is proving altogether true.  Many employers are, in fact, moving their employees onto the exchanges, although these remain the minority.  Over time, the trend will probably accelerate.  Republicans are having a field day.  But ultimately what will this mean?  The exchanges will not turn out to be chambers of horrors, but places to buy perfectly good insurance.  The shopping will be a nuisance.  Most employers are giving employees some subsidy, combined with the federal subsidies, to pay for insurance.  How the cost will compare is not clear and will not doubt vary depending on how generous the employer is.  But the administrative costs will be transferred from the employers to the employees.  I have no doubt that employees will be unhappy about this.  Given the choice between comparable insurance and comparable rates with all the administration done by the employer, and hassling with the shopping, choice and monthly payments, I have no doubt that employees will prefer the former.  They will be angry and resentful and complain about Obamacare.

But it does not logically follow that they will want to kill it.  Put yourself in their place.  You will, indeed, prefer to have your employer deal with all the red tape and resent having to deal with it yourself.  But it does not logically follow that you will want to shut down the exchange where you buy insurance and have the subsidy that makes it affordable cut off on the assumption that it will make your employer restore your insurance.  Chances are, your employer will not.

On the other hand, it may be that people who are moved from employer-based coverage to exchanges will resent the change enough to vote against that party that forced the change on you, even if the only alternative is the party that wants to shut down the whole system and deprive you of any insurance whatever!  But I suppose we cannot rule out the possibility of Republicans riding into office on a wave of anger over people being moved onto exchanges from employer based insurance -- and then running into even greater anger when they try to shut down the system altogether.

No comments:

Post a Comment