Map of life expectancy at birth from Global Education Project.

Friday, November 08, 2013

It's complicated . . .

That would not be any particular romantic or other personal relationship, but rather the Affordable Care Act and the bizarre non-system it is jury-rigged to somewhat improve. It is a true fact, which the prez failed to make clear (or probably didn't really grok himself) that some of those people who are getting cancellation notices are actually relatively affluent individuals who intentionally chose cheap catastrophic coverage because they figure they can afford to pay out of pocket for routine medical expenses. That single class of people will now have to pay more for more comprehensive policies, and won't get enough subsidy for it to end up cheaper, or perhaps no subsidy at all.

I wish I could have explained even that little piece of the whole story more simply. Now, whether any particular one of those people ends up better or worse off depends on whether they are hit by a bus or something next year. If they are, before their catastrophic coverage kicks in the deductible from the old policy would have been more than the premium for the new one. (Still complicated, sorry.) But, they probably won't be and in any case, they feel as though their choices has been restricted.

True enough. It's also true when you pay into Social Security and Medicare and pay your regular income taxes of course. And Randroids don't like that. But it's nothing new and it isn't tyranny. Let's be up front here: there is a redistributive element to the Affordable Care Act. It's intended to make the working poor, childless unemployed people, and moderate income people better off, and somebody has to pay for that. There's a modest tax on medical devices, a tax on very high end insurance policies, reductions in Medicare spending that come out of hospital incomes (basically), limits on insurance company expenses and profits (which are somebodies' income), and oh yeah, some relatively well-to-do people will buy insurance with benefits they don't need or want and that will help subsidize needier people.

In other words, like every public policy ever promulgated, there are winners and losers. In this case, the losers are people who can afford it, for the most part. (Not clear whether some lower level jobs in the insurance industry will be lost since they aren't allowed to do medical underwriting any more. But more customers should mean it's a wash, at worst.) But to be clear, the howling over Obamacare isn't really because it's a trainwreck, or communism, or tyranny -- it's because a small number of relatively well off small business owners and trust fund babies will have to spend a few bucks they were planning on spending elsewhere. You can object to that if you like, but that's really what the issue is.

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