Map of life expectancy at birth from Global Education Project.

Wednesday, May 24, 2017

No, Obamacare is not collapsing (wonky)

The Republicans are justifying their effort to strip millions of people of health insurance in order to fund tax cuts for rich people by claiming that the Affordable Care Act is "unsustainable" or, in the words of Donald of Orange, "collapsing."  The Urban Institute has done a thorough analysis of the state of the ACA. Since people nowadays have short attention spans, I'll give you the pistachio shell version.

First, some background. As you can read in my banner, the U.S. spends far more on health care (which I would prefer to call medical services but that's a lost cause) than any other affluent country. Yet they all cover everybody, and they are healthier! How can this be? We're less healthy in part because we don't cover everybody, but also because we have greater inequality, gun violence, and other social determinants of health are generally worse here.

What is more, prior to the ACA, the situation was getting steadily worse. The growth in what the Urban Institute calls National Health Expenditures (again, they mean medical services) exceeded growth in GDP by about 2.5% a year, in other words health care was gobbling up more and more  of the economy. At the same time, the number of uninsured people was growing.

The ACA put a stop to that. Obviously, it extended coverage to millions of people; yet the growth in National Health Expenditures actually slowed way down. This was partly a result of the recession and slow recovery, but also because of the ACA. The Act included Medicare payment reforms that reduced overutilization; the managed competition structure of the exchanges; and yes, reductions in Medicare payments to providers.

So what about the claims that premiums on the exchanges are skyrocketing? Actually in most of the country they are fairly stable or even declining. They are going up in places where insurers may have set premiums too low initially, and where there is no competition between insurers. They are really spiking in Arizona where state law allows for the sale of policies that aren't compliant with the ACA, which draws healthy people out of the risk pool. These problems could be fixed by regulations that pull in more competition and by getting more people to enroll. It's most difficult in rural areas. But the bottom line is that Obamacare premiums in most states are similar to, or even lower, than premiums for employer-provided insurance.

Finally, what about growth in Medicaid spending? Medicaid enrollment grew not only because of the Medicaid expansion under the ACA, but also because of the aging population, which means more people who are eligible because they are over 65, and more disabled people under 65. (The rate of disability rises with age well before age 65.) But Medicaid is the most efficient insurance there is! It costs less per enrollee than private insurance or Medicare, even though it's good, comprehensive insurance. And the cost per enrollee is growing more slowly.

So the Republicans want to drastically slash Medicaid. Who are we talking about here? Welfare queens? No, mostly elderly people who need long term care. What they want to do is kill your grandmother, to pay for tax cuts for rich people. That's because they are good Christians.


Anonymous said... reality

Anonymous said...

Not sure why Republican, male, caucasian, racist, Christian trolls haunt this website. Jackasses. You can't think straight, try to destroy good things in the world, and have really fucked-up beliefs.

Anonymous said...

Denigrating those who honestly disagree with your political philosophy with hateful epithets is not helpful.

Also, it makes you appear to be the smaller person.

Daniel said...

Appreciate the reference to paper by RWJF.

Anonymous number 1, I read the article you listed in the Sacramento Bee. Noted that it does not discuss the subject of this post, i.e. the status of the ACA. In fact, it states that health insurers in CA prefer that the ACA be strengthened. SO, what is the point you are trying to make? My take away is a sketchy article about a single payer system in CA; thought the article lacked much substance.

Anonymous #2, I agree with anonymous #3 about the tone of your statement makes you appear a smaller person.

Anonymous said...


You are correct in that the SacBee article did not directly relate to this post. However, it does address the larger picture the author has in mind.

"Universal, comprehensive, single payer national health care. That is our right.
--Cervantes March 28, 2017

Mr. Cervantes appears to be a sociologist and while I'm sure he's highly trained in his field, it doesn't make him an expert in unrelated fields such as finance or accounting. My posting the SacBee article was an effort to bring some reality to those who simply wave their hands in the air and rail for more and more social programs without any knowledge or consideration of the financial ramifications.

Certainly much higher taxes will have a ripple effect on job growth, and the ongoing exodus of small businesses, the major source of jobs, from California.

I'm not saying he's wrong. I'm just saying that those who want to make major changes in government social programs should consider *all* aspects, including the financials. That's what's been missing in these discussions.