How to fix (some of) the Obamacare mess

by on November 15, 2013 at 12:47 pm in Economics, Law, Medicine | Permalink

Ross Douthat writes:

…it does seem like there is a semi-plausible policy response to the rate shock issue, which wouldn’t roll back the ongoing plan cancellations but might make cheaper plans available to buyers going forward: Obamacare’s regulations could be rewritten to allow insurers to sell less comprehensive plans on the exchanges. This wouldn’t require doing away with every new regulation, or rolling back the pre-existing condition guarantee, which is what liberals argue the Upton bill currently being considered in the House would do. But it could involve heeding the recent hint from the University of Chicago’s Harold Pollack, a card-carrying Obamacare advocate, that perhaps in the wake of the last month’s developments the government should ”revisit just how minimal the most minimal insurance packages should be,” which in turn could open the door to allowing many more people to buy the kind of high-deductible catastrophic plans that the law currently allows insurers to only sell to twentysomethings.

These moves would not let everyone keep their existing plans, as the Upton and Landrieu bills aspire to do — but there is really nothing that the White House can responsibly do, given the law’s underlying design, that would resolve that problem. What partial deregulation would accomplish, though, is to allow some of the lower-cost plans the law abolishes to be actually revived and made available on the exchanges as “bronze” options in 2014 and 2015, rather than just temporarily grandfathered for a year or so outside them.

The post has other points of interest as well.

1 R Richard Schweitzer November 15, 2013 at 12:57 pm

This simply moves from the state regulatory systems the determinations of what forms of healthcare contracts (which include some elements of insurance) shall be available in the marketplace, rather than leaving those determinations to private actions to supply needs or wants which have been individually determined.

2 Rich Berger November 15, 2013 at 1:12 pm

Of course, the loss of individual plans is just the tip of the iceberg, so the claim that “only 5%” (by Obama and his minions) are affected is another lie. See page from Federal Register in 2010.

3 silas14 November 15, 2013 at 1:52 pm

Tactics versus Strategy.

Yes the Democrats can tinker with all sorts of ACA provisions to delay open rebellion against it, but their overall goal and strategy will remain the same — Universal Health Care in America, via compulsory economic collectivism dictated from Washington.

The progressive left has pursued this goal for over a century; some small tactical delays and concessions now are acceptable to keep ACA viable. They think long term — so should their opponents.
But the national train-wreck is inevitable until ObamaCare is totally abolished and its dysfunctional ideology exposed.

4 dead serious November 15, 2013 at 2:54 pm

Sorry you lost, whiners and cry babies!

5 JWatts November 15, 2013 at 3:21 pm

I think that jibe might be a little more effective, if we weren’t seeing Obamacare implode before our eyes.

6 dead serious November 15, 2013 at 3:29 pm

Nah. Still effective.

I’m totally against this plan but I’m totally for anything that makes Rich Berger and people like him miserable.

7 Careless November 15, 2013 at 4:07 pm

All it’s doing is making him feel superior to you (and make others see that, as well). I’m not sure why that would be your goal

8 Careless November 15, 2013 at 4:08 pm

“I supported a policy that’s failing disastrously and you didn’t, and we will all suffer because of it! haha!” is really going to get him.

9 dead serious November 15, 2013 at 4:16 pm

What an odd conclusion you draw. Making him feel superior because he’s a whiny baby?

If GWB put forth this plan he’d suck it up like a piglet – this is what it means to be a partisan hack.

10 msgkings November 15, 2013 at 4:34 pm

@ dead serious: And if GWB had done so you’d be childishly ranting against it for the same reason

11 dead serious November 15, 2013 at 4:45 pm


Swing and a miss – I already said I hated the plan. Try again.

12 mulp November 15, 2013 at 5:27 pm

I would take silas seriously if he were offering the simple free market solution of seriously holding the individual responsible for their medical debt by treating their body just like the body of a car is treated for auto related debt like towing, storage,and repair – give 30 days notice and then the body ownership is transferred to debt holder for sale in whole or in part, making euthanasia legal along with sale of organs to the highest bidder.

As long as an individual has a right to demand the “collective” serve it in its “right to life”, then collectivism is the rule imposed on all of us. Make individuals property with limited autonomy as long as totally self sufficient, but once dependent, they become the property of someone else.

If individuals has rights that the “collective” must defend, then “collectivism” is imposed by the very rights you assert.

13 Chris S November 15, 2013 at 9:53 pm

True dat.

14 T. Shaw November 15, 2013 at 1:16 pm

Obama resigns . . .

15 SW November 15, 2013 at 1:17 pm

Why not just repeal OcommieScare.sov and let the market (i.e. wiling buyers and willing sellers making exchanges) work?
JFK/LBJ have a lot to answer for with their Mediscare/Medicaid scam.
If slavery existed, would it be better to make it more efficient or abolish it?

16 Z November 15, 2013 at 1:58 pm

We cannot go back to the status quo. Before the Affordable Care Act, insurance companies were forcing people to choose between food and medicine. Today, millions of Americans are finding they no longer have to make that choice. The government no longer lets them have food or medicine!

17 dead serious November 15, 2013 at 2:55 pm

Hardy har har! Senior citizen says what?

18 Tom November 21, 2013 at 6:01 am

Troll harder, combover.

19 john personna November 15, 2013 at 1:17 pm

I’m fine with fixes, but as someone with a cheap Kaiser policy, held over and grandfathered with only an average year-to-year increase, I really suspect that there are a lot of people like me. Especially given the lack of actual data to the contrary. The cancellation/increase numbers are all “I think” and no better than guesses.

20 JWatts November 15, 2013 at 2:31 pm

The cancellation/increase numbers are all “I think” and no better than guesses.

Obamacare was written as was based upon good intentions and was no better than guessing.

21 john personna November 15, 2013 at 2:37 pm

As I understand the story, the minimum requirements were the result of a negotiation between the administration and the insurance companies, and that high minimums might have been offered to get insurance companies on board. If this is true, and we can drill down to requirements that are “too high,” I’d want to see the law changed. I don’t get the sense that is what is going on with this quick reversal, but maybe so. And perhaps insurance company anger is a good sign, from the consumer perspective.

22 mulp November 15, 2013 at 5:45 pm

Obamacare was written based on all the alternatives conservatives and Republicans offered as “better alternatives” to the ever simpler universal health care bills as you go back in time. Truman’s was the simplest, LBJ’s Medicare for all, the next, Nixon’s HMOs for all as an alternative to Teddy’s proposal, then Carter’s plan, then Clinton’s plan, with Romney doing the Obamacare demonstration in Mass as his ticket to the White House as the conservative Republican progressive populist a la Reagan.

The reason Republicans could not block Obamacare from passage is that it grew increasingly complex as every Republican complaint, save one, was added to the bill. It reduces the debt using the CBO rules doing what Ryan has proposed, cutting Medicare spending without cutting benefits, for example.

The only thing Republicans totally rejected were the tax hikes. Republicans since 1990 are subject to execution if they ever support a tax hike while in Congress. And given the Republican rule that when Democrats have any say, anything that increase the deficit is totally going to destroy America. Of course, once Republicans control the House, Senate, White House, deficits and debt no longer matter, and you can win support for going to war by cutting taxes.

If Obamacare actually reduced the deficit and cut taxes, Republicans would be on board. It should have been outsourcing the entire US health care system to Canada, or Taiwan.

23 JWatts November 15, 2013 at 6:33 pm

Obamacare was written based on all the alternatives conservatives and Republicans offered as “better alternatives”…

If you take the finest ingredients available and give them to a particularly bad cook, the results will seldom be enjoyable.

24 Yancey Ward November 15, 2013 at 5:40 pm

There is just one problem with this fantasy (besides the announced cancellations, or do you just assume all that in the news was made up, too?), John- HHS itself expected the millions of plan cancellations. That you aren’t one of them suggests that your time just hasn’t come yet. However, you really should take a job in the White House- they need the true believers of bullshit right now, desperately.

25 john personna November 16, 2013 at 7:05 pm

I freely admit that the general promise was not fulfilled. I can understand that in a mandatory system you cannot allow “fake” policies, lest slackers just buy cheap fake insurance. At this point the question should be if real, good, policies were canceled and in what numbers.

26 Matt November 15, 2013 at 1:22 pm

which in turn could open the door to allowing many more people to buy the kind of high-deductible catastrophic plans

How can they have this? The welfare component of the law requires healthy people to overpay to subsidize sick people. This is the whole basis of accepting pre-existing conditions. Whatever you think of this intention, this whole scheme doesn’t work if healthy people can make rational choices this way.

I say scrap Obamacare and create two new initiatives, one for welfare which would be simple welfare, and another for reform. Obamacare’s combining of the two always meant that it was too big and no one could get a feel of what it was trying to do.

27 msgkings November 15, 2013 at 1:52 pm

What ‘you say’ here makes sense but is completely impossible in the political reality of the day. What they should do is as you say scrap this mess and start from the ground up with agreed on principles that must happen. But the two sides aren’t about that, they are about screwing over the other side to get re-elected. And some of those principles can’t be agreed on anyway.

To put it another way, if Obama’s opponents had been willing to deal with and work on health care reform at the beginning, the result would have to be better than the mess the Dems had to cobble together. Doing nothing wasn’t an option anymore either.

28 Z November 15, 2013 at 2:01 pm

“To put it another way, if Bush’s opponents had been willing to deal with and work on Iraq at the beginning, the result would have to be better than the mess we got with the invasion. Doing nothing wasn’t an option anymore either. ”

See, this works with every crackpot claim!

29 msgkings November 15, 2013 at 2:08 pm

I thought Bush had plenty of support from his opponents, remember all the Dems voting for the war? Of course, they did so because of some trumped up false evidence (not saying the Bush team lied, but it was either that or they were duped/unrealistic/stupid…kind of like Obama and his pledge that we’d all get to keep existing insurance)

Anyway, your immediate and partisan response to my fairly nonpartisan point just shows how correct I am.

30 MikeDC November 15, 2013 at 2:53 pm

Perhaps because your point was not, in fact, fairly nonpartisan.

Your sentence could be fixed by saying:
“if Obama had been willing to deal with and work on health care reform at the beginning, the result would have to be better than the mess the Dems had to cobble together.”

Megan McArdle has a pretty succinct account of things here.

To put it another way Obama salted the political earth. Political reform requires trust between people who generally don’t trust each other. That’s why it’s difficult. But it’s especially difficult after you prove yourself to be a bad faith negotiator and you went to unprecedented lengths to not work with the other party and forge some sort of compromise in the first place.

Really, that’s still true. Even as you call for one side to help, I don’t hear any talk from any one about making real concessions that might induce votes from the other side.

31 msgkings November 15, 2013 at 3:05 pm

@MikeDC….this is what partisanship looks like. To Dems, the Reps were the earth-salting refuseniks. To Reps it was the opposite. Both are, sadly, correct.

I’m a centrist (which around here makes me a commie), and I think the current climate sucks. And it’s not all the Reps’ fault. But it’s not all the Dem’s either, and if you can’t agree with those statements then you might be a partisan.

32 Alex' November 15, 2013 at 3:06 pm

Blaming the lack of cooperation between the two parties in Washington on Obama is like a kid playing the “why are you hitting yourself?” game with his little brother.

33 Z November 15, 2013 at 3:07 pm

msgkings: Funny how the most partisan, drooling fanatics always have rabbit ears for anything they can call partisan. Sorry to disappoint you Skippy, but I thought Bush was terrible. The fact that your hero is a jug eared clodhopper does not change my opinion of Bush. It just reminds me that is always possible to find someone worse than even the dimmest bulb.

MikeDC: I recall reading way back in the olden thymes that the greatest fear of the GOP was that Obama would try to meet them part way. If he cam across as a genuinely bipartisan, like Clinton did at times, they would have no choice but to roll over for whatever he wanted. Instead he went for scorched earth and finds himself with no friends now.

The funny thing is that even at this late date he could probably score a huge win by inviting the GOP leaders over and making a deal. He would look like a statesman and maybe gets some help fixing his mess. Instead, it is more the finger in the eye stuff. The American Left is nothing but a reactionary outfit these days. Whatever their enemies are for, they are against.

34 msgkings November 15, 2013 at 3:36 pm

No need to apologize, Z. You can’t disappoint someone who doesn’t care one iota what you think about anything.

35 MikeDC November 15, 2013 at 5:34 pm


Well, no, it’s not what partisanship looks like. At least not historically in the US. Sure, everyone says the other guys are terrible, but there were still consistent cross-party communications procedures and actions. Somewhere around 2005-2006 these things seem to have fallen apart, and they became orders of magnitude worse under Obama.

For that matter, I’d argue it’s probably quite a bit just plain old “Obama’s fault” not just the Dems or Reps fault. What’s really telling on this point is that intra-party communication, compromise within the Democratic party, have been documented as demonstrably worse under Obama. In a way it’s not surprising that he’s been unwilling to communicate and deal with Republicans when he’s so rarely been willing to communicate and deal with other Democrats.

Blanket statements about blame and centrism tend to overlook the very real work of agenda setting, leadership, and negotiation.

36 derek November 16, 2013 at 12:58 pm

I would have been pretty cool with Bush not starting the Iraq war…

37 john personna November 15, 2013 at 2:51 pm

Bush had a lot of support from those who just hoped the saber rattling was to get the UN Inspectors in and working. Remember that? And then the Bush administration wanted them out so they could begin the war. Bait and switch, more than a little.

38 TMC November 15, 2013 at 10:21 pm

Bush always did catch the liberals off guard by just telling them what he intended to do. Then he did it.

When you lie about everything the truth is devastating.

39 mike November 15, 2013 at 2:17 pm

Why was doing nothing not an option? 90% were covered, and 90% of those were happy with their coverage. The only people clamoring for change were lunatic shitlib ideologues with an extremely feeble understanding of European systems, demanding that we go to “the European system” because they prefer it aesthetically and ideologically. When they couldn’t get that, they felt like they still had to “do something” while they still had their extremely thin legislative majority (which was about to disappear due to a special election) so we got this hodgepodge of technocratic managerial think-tank trash heap of a law.

40 msgkings November 15, 2013 at 2:31 pm

Well, besides trying to get tens of millions of people either covered or happier with their coverage, there was also the pre-existing condition inefficiency issue keeping people tied to jobs they hated. Not to mention the cost curve bending goal. The system as is was not working, definitely not efficient.

But your boring re-use of the term ‘shitlib’ also shows how correct I am about the level of partisanship, and how that can help create messes like ACA.

41 Dan Weber November 15, 2013 at 2:52 pm

The “P” in HIPAA stands for “portable.” Meaning people already had pretty wide freedom to switch jobs even with pre-existing conditions.

There was a lot broken with the old system and not all of it was fixable by conservative memes about selling insurance across state lines or tort reform. That doesn’t justify the Politician’s Syllogism.

42 msgkings November 15, 2013 at 3:01 pm

@ Dan: did HIPAA really help much there? You’re right that there was some protection but c’mon, people staying in jobs for health insurance (sometimes not for them but for a disabled spouse or kid) was a real thing.

And you make a decent point that doing nothing might have been better than ACA (I don’t agree), but can you agree that doing something better than ACA would have been better than nothing?
And do you agree that given the political climate in 2009 and 2010 that doing something better and more bipartisan than ACA was pretty much impossible?

43 Z November 15, 2013 at 3:10 pm

So when your car won’t start, you toss a few sticks of dynamite into it? After all, doing nothing is not an option. Here’s something to chew on kid. Cliches are not the same as arguments. And ‘partisan” does not mean “bad” no matter what they say in the hive.

44 dead serious November 15, 2013 at 3:32 pm

You (idiot) using the term ‘hive’ is hilariously meta.

But you wouldn’t understand what that means.

45 Dan Weber November 15, 2013 at 3:32 pm

Yes, HIPAA helped a lot. Seriously, if you switched jobs and switched insurance you were protected against pre-existing conditions. You had to keep a certain amount of insurance in the meantime, but you were allowed pretty big gaps. And medium-to-big sized employers were required to sell you a policy at their cost under COBRA rules if you left them for over a year.

If there were problems here (and I’m not saying there were not at all), you could have done something much simpler to address it, besides requiring everyone to jump into the community-rating pool.

46 msgkings November 15, 2013 at 3:40 pm

@ Dan: I’m all ears, what would have been better? Must assume the partisan climate when you answer.

@ Z: do you find that calling polite posters ‘Skippy’ and ‘kid’ helps or hurts your arguments?

47 Dan Weber November 15, 2013 at 4:12 pm

Well, what was the problem with portability?

If the gap was too short for people moving jobs: extend the 63-day gap; reduce the headcount where employers are required to provide COBRA from (IIRC) 50 to (say) 10

If people couldn’t afford the coverage between employers: be even looser about the private insurance that is required to cover the gap, maybe even allowing catastrophic insurance to work as long as the condition first occurred under a plan that included it

If the problem was that people couldn’t be guaranteed that a spouse/child would be covered, then require that employers (over a certain size) and group-insurers that offer insurance only covering the individual employee allow employees to buy-up to spouse and/or family coverage at the standard rate.

48 msgkings November 15, 2013 at 4:37 pm

@ Dan: pretty good ideas to solve the portability problem, if done right. Now how about bending the cost curve and getting insurance to the many without, the ones that drive up costs for all of us when they get emergency room care?

49 Dan Weber November 15, 2013 at 10:13 pm

How much savings do you think are there? How much of the national health care bill would go down because some people stop using the emergency room as primary doctor’s office?

I used to think this was an amazing way to reduce costs, and all without goring someone’s ox, but the percentages are tiny. They are even worse if you look at how mediocre the real-world results are in places like Massachusetts.

We aren’t going to contain costs until we work up the gumption to start rationing care. That’s something that neither party can do by itself, because the other party will easily play them as the villains.

50 F. Lynx Pardinus November 15, 2013 at 2:32 pm

The individual market in my state was horribly broken. Now it’s totally my state’s problem, not the fed’s, but let’s not pretend everything was roses.

51 Dan Weber November 15, 2013 at 2:44 pm

Yeah, lots of things were broken before. This doesn’t mean trying to pass any law was a good idea.

Many parts of Obamacare require everyone to jump into the (so to speak) pool at once, so that it’s very very vulnerable to the slightest error or delay, which is exactly the wrong thing to try to pass via party-line vote. Even if the only reason you have to do a party line vote is because the other side is full of complete assholes. That doesn’t make the law better because it’s the best you could do.

52 mike November 15, 2013 at 2:46 pm

I’m not suggesting everything was roses, but there was no need for a top-down redesign of the entire system

53 jonfraz November 17, 2013 at 6:39 pm

Mike, we did not redesign the entire system. Medicare has not changed at all, and the employer system has seen only minor tweaks. That’s the vast majority of the system right there. We only modified the individual market, which was highly dysfunctional, so it would work like the group market. No one complains that everyone in a given employer group pays the same rate no matter their age of health status: people think it fair and just and proper, and how things should work.Yet a small handful of articulate upper middle class types find their premiums going up and suddenly it’s the worst atrocity on American soil since the massacre at Wounded Knee.

54 dead serious November 15, 2013 at 2:57 pm

“90% were covered, and 90% of those were happy with their coverage.”

Says your mom. Bullshit stat pulled straight out of her ass.

55 JWatts November 15, 2013 at 3:07 pm

90% is a high number but certainly a majority of Americans thought their care was good.

Gallup Poll – Nov 2007 – “Eighty-three percent of Americans rate the quality of healthcare they receive as excellent or good, while only 15% say theirs is poor. Slightly less, 70%, say their healthcare coverage is excellent or good. ”

56 JWatts November 15, 2013 at 3:24 pm

Oops, I should have bolded the 70%. My mistake.

57 Dan Weber November 15, 2013 at 3:27 pm

Yeah, Sebelius herself will tell you that a super-majority of Americans like their current insurance. That’s why they didn’t try to put everyone on single-payer, and why the “if you like your insurance you can keep it” pledge was so important. If most people hated their insurance, there would be much less need to promise people that their things won’t change.

58 Cynthia November 15, 2013 at 3:22 pm

Those on the far right believe, I suspect you as well, that ObamaCare is patterned after European healthcare. All of you couldn’t be more wrong. The Europeans have either cut out insurance or have made them a virtual arm of the government, regulating every aspect of what they do down to their profits. ObamaCare is purely the American way — Wall Street healthcare, turning what should be a public service into a profit center for big business. It results in the least efficient healthcare in the world and it produces terrible outcomes except for the extreme wealthiest. This is not government-run healthcare; it is corporate-run healthcare as American as apple pie — not a good thing.

59 mike November 15, 2013 at 7:04 pm

I personally don’t believe that ObamaCare is patterned after European healthcare, that’s why I said we got Obamacare because they couldn’t get what they wanted which was their vague notion of what European healthcare is. As for the rest, you’re full of shit, our outcomes are the best when you isolate the actual medical care versus lifestyle issues, and Obamacare is absolutely government micromanaging medical care but with the veneer of free markets (and yes a healthy vig for the insurance companies for playing along with the charade). You obviously have no idea what you’re talking about, and you’re probably one of those people I was describing who knows jack shit about Europe but idealizes it because you’re a retarded shitlib.

60 jonfraz November 17, 2013 at 6:45 pm

Two European countries, Switzerland and the Netherlands, have health coverage systems very similar to the ACA. Europe is anything but monolithic and it is not all Single Payer systems.

61 Matt November 15, 2013 at 1:33 pm

The whole idea of Obamacare is to overcharge young, healthy people to make health care affordable for older, sick people. If we are not overcharging the former group, how will we pay for the latter group?

Even if it could be made to work in an actuarial sense, it doesn’t do much to help all the problems now. The death spiral and millions of people facing loss of coverage (because there’s no way insurance companies can rewrite all of their policies and systems in the next six weeks) are still going to deal a heavy blow to Obamacare. This proposal is akin to getting your mechanic to cover the cost of your car’s 60,000 mile maintenance while said car is on fire at the bottom of a ravine.

62 Michael November 15, 2013 at 3:20 pm

That’s the theory, not the reality. The reality is that premiums are going up more more routinely (and by larger amounts) than they are going down. A big reason for this is that the insurance minimums are in many cases absurdly high. The original HHS draft said plans must include one drug in every class (i.e. usually the generics will work), but Pharma got involved and got the standard raised to “benchmark” drugs that commonly are expensive name brand stuff. Similarly, insurance minimums include such insane things like mental health coverage, acupuncture, chiropractic care, fertility treatments, in-patient drug rehab, etc, etc. This raises the bar for almost everyone, not just the uninsured, and is why the rate shock is so high.

Shifting the uninsured onto plans actually would have relatively little effect, as private insurance companies already (indirectly) subsidize most uncompensated care by overpaying for the treatments of covered individuals. And, much of the subsidies actually cover under-compensated care (i.e. Medicaid and Medicare), more-so than uninsured. The rate shock people are seeing has much more to do with raising standards than it does with pooling.

63 Cynthia November 15, 2013 at 3:24 pm

The majority of healthy 20 somethings faced with the choice of signing up for healthcare or keeping their smartphone will not hesitate to keep the smartphone. Unemployed or underemployed young adults don’t have enough money to support all the Corporate profiteers in healthcare, energy, food, and technology and most of their parents are tapped out thanks to the rape of the housing equity/bubble.

This lack of young and healthy enrollees will cause insurance premiums to rise, which will cause more young and healthy to exit, and so on. In the end, you will only be left with the poor whose plans are paid for by the government, and the extremely unhealthy. Government healthcare expenditures will skyrocket.

The future isn’t look so bright in terms of risk pools in ObamaCare-land.

64 jonfraz November 17, 2013 at 6:47 pm

The young are not being overcharged. If health coverage were sold the way 99% of all other products are sold everyone would pay the same price for the same product. The old are still being charged higher premiums. So it’s the old who are being overcharged., A sane system would sell the product the same way gasoline, computers, Big Macs and a million other products are sold: one price for one product.

65 T. Shaw November 15, 2013 at 1:41 pm

Instead of screwing all Americans screw the lawyers.

Begin with limiting malpractice suit awards . . .

Obama delenda est.

66 jeff fisher November 15, 2013 at 2:16 pm

35 states already have, to various degrees. Doesn’t have a significant effect on overall cost.

67 JWatts November 15, 2013 at 2:39 pm

Very few of those states have significant restrictions on malpractice suits.

68 Spencer November 15, 2013 at 4:46 pm

Texas does and it did not make any difference.

69 JWatts November 15, 2013 at 5:50 pm

Doctors believe Texas’ professional liability climate has improved in the last 10 years, according to a survey by the Texas Medical Association.

TMA is one of the nation’s largest and oldest medical societies, and represents more than 47,000 physician and medical student members in the state.

According to survey results released Monday, Texas physicians say, as a result of the state’s medical liability reform in 2003, they feel assured they can take on the most complicated illnesses and serious injuries without fear of facing a baseless lawsuit in return.

70 AlanW November 15, 2013 at 8:14 pm

I say this in all seriousness, since this is an article of faith on the right and (in my opinion) somewhat unwarranted derision on the left: You’ve got to do better than “doctors believe.” What has happened to medical malpractice insurance premiums in Texas? That’s the only metric that matters. My suspicion is that limiting malpractice awards can do a modest amount of good and is worth including in a larger reform plan (it’s a good bargaining chip if conservatives are willing to put tax increases or expanded social services on the table), but I am highly skeptical of those who think it can be a panacea by itself.

71 Dan Weber November 15, 2013 at 10:47 pm

If one hopes to use tort reform to contain costs, you have to be very particular about how it is done.

Probably the best hope is that you can get doctors to ease up on defensive medicine by providing them some reassurance that they won’t have to face a courtroom if they don’t MRI every guy that comes through with a backache.

That would only be one part of some kind of efficiency-based health care system.

72 Eric Rasmusen November 15, 2013 at 1:42 pm

The big problem is that allowing rational health insurance is illegal. State laws require gold-plated coverage, and the Obamacare bill adds a bit more gilding. Of course, all economists agree that people should be allowed (and encouraged) to only buy high-deductible catastrophic insurance, but state and federal law prohibit that. Thus, we have a trade-off between good policy and rule of law.

73 Slocum November 15, 2013 at 2:15 pm

Obviously existing state laws *don’t* generally require gold-plated coverage and forbid high-deductible plans — otherwise existing plans would already be ACA compliant and there would have been no need for grandfathering or cancellations.

74 alkali November 15, 2013 at 1:50 pm

I for one am not interested in getting “cancer” or “mental illness” — they sound horrible — and I should be able to buy insurance that does not cover those things. If I did get them I could just go to the emergency room and let my fellow taxpayers pick up the bill. That’s a free market solution that could work for everyone.

75 msgkings November 15, 2013 at 1:54 pm

What you did….it’s there, and I see it.

76 Marie November 15, 2013 at 2:18 pm

Yeah, but generally in people with little to lose.

Insurance is asset protection, so those without any assets are likely to behave exactly in that manner — I won’t get sick anyway, and if I do, I’ll deal with it then. This isn’t irrational thinking, it’s balancing risks — why would I buy insurance for a condition I’m statistically unlikely to face in order to avoid a bankruptcy that wouldn’t hardly even smart?

It’s one problem with ACA, it’s trying to do workarounds on rational human behavior. Set all morality and social contracting aside, if you are trying to set up a system to make people do what it makes little sense for them to do, it’s going to be a pretty convoluted and coercive system.

How about this for a thought exercise — what if scrapped ACA but we gave every American a $500,000 bank account. How many uninsured folks would run out tomorrow and buy insurance? Tons, and not just because now they could afford it. Because now if they got sick, they’d have assets to lose, so they will spend $10,000 a year to protect the $500,000 that could disappear quickly with an accident or illness.

77 msgkings November 15, 2013 at 2:35 pm

This is not a bad point, so then how do we pay for the health care of those with nothing to lose? The old way (emergency room only) wasn’t working.

78 JWatts November 15, 2013 at 2:42 pm

Repeal the Emergency Medical Treatment and Active Labor Act.

79 jpa November 15, 2013 at 2:44 pm


80 Roy November 15, 2013 at 3:03 pm

Actually it sort of was working. Not great but maybe better than this solution.

81 Marie November 15, 2013 at 9:00 pm

I think it could have been, and might soon be, worse.

But it was bad enough that compassion and reason says we should have improved it. I do think there were a number of options that weren’t a total overhaul of the system, though.

82 Morgan Warstler November 16, 2013 at 1:40 pm

Soup Kitchen Care:

Out of patent drugs
Student doctors
Xrays, not MRIs

Whatever can be afforded for $3K per man per year.

83 dswarts November 15, 2013 at 3:26 pm

I am going to buy car insurance that only pays when I get rear-ended since that is what is most likely to happen to me. I am a very careful driver! So I am not going to worry about being hit from the side or front because that is a much less likely event.

84 Dan Weber November 15, 2013 at 4:15 pm

If you wish to do that, I don’t see why anyone should stop you.

That’s very different from requiring you to buy a catastrophic plan (or put up a bond) that covers the damage you could do to other vehicles before letting you pilot a one-ton vehicle on public roads.

85 Ricardo November 15, 2013 at 2:19 pm

Emergency rooms are not required to treat your cancer. They are required to provide emergency care.

If your tumor breaks the surface of the skin and bleeds, they will close the wound. No one gets chemotherapy in emergency rooms.

86 alkali November 15, 2013 at 2:22 pm

Clarification: I was not serious about wanting “insurance” that would send me to the emergency room or bankrupt me in the event I had cancer.

87 mike November 15, 2013 at 2:30 pm

But you did seriously imply that cancer is treated in emergency rooms for people who don’t have insurance.

88 msgkings November 15, 2013 at 2:37 pm

No he humorously pointed out that those who refuse to insure against risks like cancer are a burden on us all.

89 mike November 15, 2013 at 7:06 pm

… because they are treated in the emergency room.

90 ebase22 November 15, 2013 at 2:07 pm

So this brings up another question I’ve had that I haven’t seen an answer to yet. The purpose of the mandate is to prevent an adverse selection problem created by guarenteed issuance and community rating. But this is just a mechnism to make people get into the system generally.

But is there anything in this that would prevent an adverse selection problem between plan tiers? Why would a healthy young person not generally buy the bronze plan, as it is currently or this more relaxed option, while only onlder and sicker people buy the gold? Could I not start with the bronze and then once i have a chronic issue I upgrade to the gold after the fact?

91 Marie November 15, 2013 at 2:21 pm

I think, again, we’re talking about the loss during a gap. If there is a period of time between getting sick and swapping up, is the increase in out of pocket large enough to be a disincentive.

Also, are people going to be able to predict that they might be, say, bankrupted or lose half their retirement or whatever while waiting for the gold plan to kick in. If they can’t see the problem, they won’t plan for it.

92 ebase22 November 15, 2013 at 2:29 pm

But the difference between plans isnt what they cover. It’s that the deductables and coinsurance are higher in the lower plans. It’s really not a case of bankruptcy or not, it’s more of a case of it i at this point dont use healthcare I’m going to the lower premium, higher deductable, and if i am currently ill/ have a condition, i buy the gold one.

Even if we assume people don’t change after the fact (which they still might) what is keeping the gold pools are largely being filled by people with existing chronic problems and the bronze polls eing filled with mostly healthy.

Because the companies can’t charge based on one’s actual risk, i still see a big potential for inter tier adverse selection. Am I missing something?

93 ebase22 November 15, 2013 at 2:31 pm

And an for an adverse selection problem to be signifigant, ti doens require that ALL healthy people buy the bronze and ALL the older/ sick people buy the gold. It onyl requires a disproportionate amount to more between the two, which would drive premiums up in the gold relative too the bronze, even adjusting for the higher deductable, which starts the spiral.

94 JWatts November 15, 2013 at 2:48 pm

Because the companies can’t charge based on one’s actual risk, i still see a big potential for inter tier adverse selection. Am I missing something?

No, that’s exactly what will happen. It’s the rational economic response to the Obamacare system.

Well, in practice it will probably be more like. A) No plan and make sure your tax with holdings are negligible. B) When you get sick, either get married, divorced or quit your job and then declare a life change exception to enroll in Bronze coverage. C) If the illness is chronic or major then upgrade up to Gold at the next renewal period which is more than 9 months away.

95 Marie November 15, 2013 at 8:59 pm

Yes, I see what you mean now, the hit on cost would just be what the event cost you from the greater deductible, essentially, and the differences in deductibles won’t be so huge as to make it not worth taking the risk of staying bronze until you have to change?

96 Bjartur November 15, 2013 at 2:22 pm

C’mon Ross, ixnay on the ausiblyplay iablevay olutionsay. I just hope nobody from Heritage suggests this or the administration will jump on it.

97 Mahesh Paolini-Subramanya November 15, 2013 at 2:28 pm

Heh, quoting Douthat as an authority on something.
Good one there – you got me!

98 Bill Kilgore November 15, 2013 at 2:42 pm

Douthat wasn’t quoted as an authority. Douthat’s comment was highlighted so that people who agree, or disagree, could use his comment as a starting point for providing their own valuable insight.

Care to guess how you did in that endeavor?

99 Bill November 15, 2013 at 2:51 pm

When I read the article, I wondered if Douthat would also support requiring a private insurer offering a minimal coverage plan to require that same insurer to offer a greater coverage plan the next year if the insured got sick or injured during his coverage of the minimal coverage plan.

That, afterall, is what he is proposing…only you are the insurer for the second plan, either through coverage or subsidy of hospitals to cover the uninsured or poorly insured.

100 JKB November 15, 2013 at 2:50 pm

Because the purpose of the ACA wasn’t to provide insurance in the traditional sense but to get everyone into the buyer’s club portion to fund the “freebies”. Especially, freebies for favored constituents.

If you let people opt out of the buyer’s club, they may want to stay out which would make the “freebies” expensive indeed.

If this was real health insurance reform, the mandate would have been limited to everyone carrying a high deductible catastrophic policy to stop the “emergency room” gambit. With perhaps some sort of federal insurer of last resort for those with pre-existing conditions that consume some large portion of income.

101 Willitts November 15, 2013 at 2:55 pm

So the “fix” for Obamacare is to retreat to the catasteophic health care plans that George HW Bush tried to implement in 1991 and that Democrats opposed.


102 Albigensian November 15, 2013 at 3:05 pm

It seems likely that most holders of these catastrophic-only policies are in good health. And therefore removing them from the Obamacare risk pool will result in adverse selection.

But then there are all those mandates. It’s not just that your catastrophic plan may not pay for birth control. In states that permit it, insurers may charge men and women different rates (young men are more likely to die from violence but have a much lower pregnancy rate). Or just get around some of the risks (e.g., pregnancy) by not covering them.

Obamacare includes not only minimum mandates and government subsidies but also assorted cross-subsidies (of which the most obvious is “young and healthy,” although “young, health, male, and don’t live in a high-crime neighborhood” would probably be more accurate.

The point is, once insurance rates are set by factors other than actuarial risk there are sure to be problems when some can delay or avoid participation. If Obamacare were more honest then premium bills would contain separate line items for insurance, cross-subsidies (positive or negative), and government subsidy (always negative). Its financial weakness is that it depends on all these pieces to be in place- once one of the pieces is removed then it starts to fail.

103 ummm November 15, 2013 at 4:03 pm

stocks going bonkers..i guess that will make it easier to pay the fine

104 Careless November 15, 2013 at 4:05 pm

So will the current insurance policies cover all of the cases of whiplash from Obamacarebots screeching to a halt on the “those weren’t real insurance” thing?

105 Michael Foody November 15, 2013 at 4:19 pm

My big problem with the ACA has always been the level of coverage (that and that it does relatively little to correct the supply side features that drive high healthcare costs in America). The right wing has an ideological commitment to the supremacy of the market, but it’s difficult for me to look at international comparisons that show Americans paying radically more than other countries do for care that is little better than provided elsewhere and is all but out of reach of a large numbers of people. I wish the right was less invested in the particular mechanism of delivering state healthcare and more interested in checking left’s generosity with other people’s money (which is a problem with medicare as well). I think a public option that provided bare bones coverage that was broadly affordable would serve the dual function making basic care available to more people and providing an important check on the ability of the medical care industry to take advantage of asymmetrical information to up-sell people on expensive medical services that would fail the average individual’s cost benefit analysis.

106 Rick November 15, 2013 at 5:40 pm

I know how to fix the problem.

Single payer.

107 Yancey Ward November 15, 2013 at 5:45 pm

Douthat is supporting a policy that will immediately gut the exchanges by removing the direct subsidy paid by the healthy to the sick, and to the high users of routine care from those who only visit a doctor’s office by complete accident.

108 Yancey Ward November 15, 2013 at 5:48 pm

The next shoe to drop, when the website is finally working is when people start paying bills with bronze and silver plans they have been led to believe cover 60-70% of their costs. They are in for a huge education on the term “actuarial value”.

109 JWatts November 15, 2013 at 5:58 pm

Yes, I wonder what the actual median coverage will be? 20%, maybe? There’s a very big difference between mean and median costs in such a group.

110 Yancey Ward November 15, 2013 at 6:09 pm

For some of the plans, you can actually get calculated scenarios such as for a birth, or diabetic treatment. I just know it has been greatly amusing reading the complaints of Democrats about how little is actually covered by bronze and silver plans for anyone who doesn’t exceed the cap for out of pocket costs.

What is worrying, though, is how few people actually understood what the 60-70-80-90% actuarial levels for the plans actually means, and I have to say the pundits have done a sorry job doing so. A lot of people are going to be buying plans with a certain expectation that isn’t there. Your guess about 20% for the median buyer on a bronze plan is pretty damned close. There are going to people having a kid next year, and getting a bill for 80% of the birth costs when they thought such plans covered this event.

111 Yancey Ward November 15, 2013 at 6:13 pm

And one of those Democrats I read the other day thought it was the insurance companies breaking the law by having a bronze plan pay so little. The insurance companies probably are in for a lot of bad press in the next year, none of which will really be their fault.

112 JWatts November 15, 2013 at 6:37 pm

The insurance companies probably are in for a lot of bad press in the next year, none of which will really be their fault.

If the insurance companies can be bankrupted and/or scapegoated, it opens the door for single payer.

113 derek November 16, 2013 at 10:48 am

I think it is time to put that idea to bed. The more likely scenario is a collapse of the insurance market leaving many incapable of getting coverage, and those who have coverage through their workplace will face skyrocketing premium costs and dramatically shrinking coverage. The US government doesn’t have the money, and I doubt investors would be happy with 2% on their money when it is going to bail out insurance companies or pay for hip replacements of retired folks.

There are lots of shoes yet to drop. There were some surveys back in 2009 of doctors plans if this type of legislation passed. There were a significant number who would simply up and quit if faced with this nonsense. So what if you have insurance but you can’t get a doctor. Welcome to Canada, the land of free health care and 13 month waiting lists for a pregnant woman to get a GP.

And to think that a third of the way in the process of this website being developed folks stopped showing up for meetings. There is an appropriate response to this type of irresponsible exercise in power. I suspect the voters will not hang a bunch of politicians from lamp posts, but we will see veto proof majorities in both houses after 2014.

114 Paul November 16, 2013 at 2:28 am

Fascinating. How often were we told it was game over for the opposition because the ACA was “the law of the land.”

Apparently the provisions of the ACA can be rewritten at will by the monarch – oops! sorry! I mean the President – by directing his subordinates to simply rewrite HHS regulations.

Cool! So a Republican President could effectively neuter the entire thing without the trouble of going through Congress.

115 anon November 16, 2013 at 9:07 pm

Tyler, you are such a troll.

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