Tag: ObamaCare

Must-read: Richard Mayhew: “ESI, Stability and Cost”

Posted on by Brad DeLong

Must-Read: Richard Mayhew: ESI, Stability and Cost: “Kevin Drum is highlighting a point I’ve made before…

…One of the big reasons for the slow growth in Exchange enrollment is that employer sponsored insurance (ESI) has not collapsed. The Congressional Budget Office had projected for years that millions of people would lose their ESI and go on Exchange.  That did not happen: “After four years of private coverage hovering around 61 percent of the population, it jumped up to 66 percent within the space of a single year.” Was this due to the economic recovery? Probably a bit of it. But the economy has been puttering along at about the same pace ever since 2012. The only thing that changed in the fourth quarter of 2013 was the introduction of Obamacare….”

It is not always preferable to have someone on ESI rather than on an Exchange policy or Medicare or Medicaid or CHIP…. ESI is seen as part of the background status quo, so when Mid-Size Motors switches coverage from Aetna to Cigna to save $2.32 per covered life per month, that is just HR doing their thing. It is less disruptive but it is not uniformly better.  If it was uniformly better, the ACA would have just been massive subsidies to employers to provider coverage with a hard employer mandate (see 1993 Clintoncare) and some type of safety net for people out of the work force.  We did not go down that route…. ESI… is good insurance for people who are the least likely to need it…. ESI is not an unmitigated success story on any metric is that ESI is expensive…. It is a good in that higher ESI is less disruptive of a change than an ESI dump but it comes at the cost of giving people expensive and potentially not too usable coverage.

Must-read: Michael E. Martinez et al.: “Health Insurance Coverage: Early Release of Estimates From the National Health Interview Survey”

Posted on by Brad DeLong

Must-Read: Michael E. Martinez et al.: Health Insurance Coverage: Early Release of Estimates From the National Health Interview Survey: “This report includes 2015 estimates for 37 selected states…

…The number of uninsured persons has declined in the past 2 years. In the first 9 months of 2015, 28.8 million persons of all ages (9.1%) were uninsured at the time of interview—7.2 million fewer persons than in 2014 and 16.0 million fewer than in 2013…

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Must-read: Richard Mayhew: “CHIPPING Away at Uninsurance”

Posted on by Brad DeLong

Richard Mayhew: CHIPPING Away at Uninsurance: “The Arkansas Times named its person of the year…

…all the Arkansans who are newly insured. There was one vignette that stuck with me:

The average high school senior isn’t too worried about insurance coverage, but for Fairfield Bay native Crystal Bles, it was a priority…. While many young adults now rely on their parents’ insurance to stay covered until age 26–thanks to another change created by the Affordable Care Act–Bles’ parents were uninsured…. She ‘most definitely’ knew she needed coverage, she said, given her chosen area of study. ‘In welding, people tend to get injured.’… For young Arkansans like Bles, the private option has already become a fact of life [my emphasis]— a vital government service, funded by taxpayers and provided for taxpayers, just like public schools and food stamps, highways and Pell grants, law enforcement and libraries.

There have been numerous liberal attempts to slowly build… by proposals to lower Medicare eligibility age. The theory… is that taking the most expensive people off of the private market… will save money systemically and not face significant opposition as employers and private insurers will want to dump their most expensive covered lives to someone else… anything that shifts people from the most expensive part of the covered system (employer sponsored insurance) to a less expensive part (Medicare) is a big win. The final part of the theory… is that the change to Medicare for 60 year old individuals works well and is not too scary so the next slice of the salami….

What if we are trying to cut the salami from the wrong end? Kids are adorable, sympathetic and, after they start crawling, dirt cheap to cover.  Kids use lots of low cost services but they are unlikely to need high cost services. What if  the Childrens’ Health Insurance Program (CHIP) was expanded to be the most probable insurance  to every kid between the ages of birth and nineteen?

Obamacare increases the salience of antitrust in health insurance markets from “important” to “essential”

Posted on by Brad DeLong

As the extremely sharp Aaron Edlin has taught me, apropos of the current wave of proposed health insurance mergers—Aetna-Humana, Anthem-Cigna, and Centene-HealthNet:

The coming of Obamacare makes any willingness on the part of antitrust authority to allow these mergers to go through extremely dangerous and destructive policy indeed.

The imposition of the individual mandate to purchase health insurance makes maintaining competition in health insurance markets significantly more important. Usually, the exercise of market power and the ability to easily collude implicitly or explicitly made possible by large market shares are curved by the possibility of exit. The “exit the market and buy something else” option for consumers is the one competitor that the firm cannot acquire and merge with. It is the one competitor with which the firm cannot collude, implicitly or explicitly.

Imposing an individual mandate to purchase is a wise policy in a marketplace where the major market failure is adverse selection. It threatens to be a catastrophic policy in the marketplace where the major market failure is the exercise of sellers’ market power.

(AP Photo/J. Scott Applewhite, File)

Must-read: Max Ehrenfreund and Carolyn Y. Johnson: “One of the Biggest Fears about Obamacare Never Happened”

Posted on by Brad DeLong

Must-Read: Max Ehrenfreund and Carolyn Y. Johnson: One of the Biggest Fears about Obamacare Never Happened: “Opponents warned that the law would discourage large numbers… from working…

…force millions into part-time jobs and make it more difficult to find work. Three new studies released this week suggest that, so far, it hasn’t happened…. If the law has had any effect on the labor market, it’s been a small one. ‘There were a lot of stories about employers, with anecdotes about employers shifting jobs to part-time,’ said Larry Levitt, an economist at the Kaiser Family Foundation not involved in the new research. ‘You can’t deny those stories–they’re real. They’re just not generalizable. It’s not what is mostly happening’…

Must-read: Kevin Quealy and Margot Sanger-Katz: “The Experts Were Wrong About the Best Places for Better and Cheaper Health Care”

Posted on by Brad DeLong

Must-Read: This excellent piece reminds me to worry: What risks does the departure of David Leonhardt from The Upshot create for it?

Kevin Quealy and Margot Sanger-Katz: The Experts Were Wrong About the Best Places for Better and Cheaper Health Care: “These [Medicare and private insurance cost] maps look nothing alike…

…Their big differences are forcing health experts to rethink what they know about health costs…. Grand Junction spent far less money on Medicare treatments–with no apparent detriment to people’s health. The lesson seemed obvious: If the rest of the country became more like Grand Junction, this nation’s notoriously high medical costs would fall…. [But] places that spend less on Medicare do not necessarily spend less on health care over all. Grand Junction, as it happens, is one of the most expensive health-care markets in the country for the privately insured…. Health-care researchers who have seen the new findings say they are likely to force a rethinking of some conventional wisdom about health care. In particular, they cast doubt on the wisdom of encouraging mergers among hospitals, as parts of the 2010 health care law did…. Some of the areas with the most cost-effective Medicare providers also have lower-cost private health care–but just as many places with relatively low Medicare costs have high private insurance spending.

Well done, Quealy and Sanger-Katz!

Must-read: Jonathan Chait: “Sorry, Conservatives, Obamacare Is Still Working”

Posted on by Brad DeLong

Must-Read: Does Ross Douthat not understand that the “Cadillac Tax” is an essential part of every single Republican ObamaCare replacement plan? That while it is an important part of ObamaCare, it is not an essential part of ObamaCare? Or does he understand that element of the situation, but hope that his readers do not? Jonathan Chait reports. You decide!

Jonathan Chait: Sorry, Conservatives, Obamacare Is Still Working: “Ross Douthat’s Sunday column, as it so often does, offers the least unreasonable iteration…

…of the deranged state of conservative thinking on Obamacare. While no longer collapsing spectacularly, Obamacare is now sadly limping along in disappointing fashion, remaining just healthy enough not to expire…. The worst thing that’s happened to Obamacare is that Democrats have revolted against the Cadillac Tax. President Obama had to agree to delay the tax’s implementation for two years as part of the recent budget deal, in return for lots of good liberal policy (like tax breaks for green energy and low-income families). The Cadillac Tax would be in decent shape if Obama could just use his veto to keep it in place two years from now. The trouble is that Hillary Clinton, pressured by unions, has also come out against the Cadillac Tax. So now you have pro-union Democrats and anti-tax Republicans forming a coalition that looks like it can prevail starting in  2017, regardless of which party wins the election.

So, yes. Bad news for Obamacare, which looks like it has lost one of its many cost-control elements. But as bad as this news is for Obamacare, it’s absolutely catastrophic for Obamacare replacement. Every Republican plan to replace Obamacare relies on the same financing mechanism: limiting or repealing the tax break for employer-sponsored insurance. The Cadillac Tax is a smaller, more painless version of this same policy. If both parties can’t abide a partial rollback of the tax break for the most expensive health plans, they’re never, ever going to go along with eliminating the entire tax break for all health plans. The conservatives cackling over the demise of the Cadillac Tax are delusional — it’s as if they’re watching the backlash against the Iraq War in 2008 with fingers tented, anticipating that this will encourage war-weary Americans to support a land invasion of Russia. The bipartisan support for maintaining the tax break for employer insurance will hurt Obamacare, but it can survive. The Republican plans to replace it would all be wiped out.

The Cadillac Tax debacle illustrates a crucial underlying reality of the politics of health-care reform: Change is incredibly difficult. That is why the United States staggered along for decades with a system that simultaneously spent far more per citizen than any other system in the world and cruelly denied treatment to millions. The compromises in the law are a function of this reality. Obamacare’s drafters could not draw up a blue-sky plan as though they were free to design the system anew. They had to work around an entrenched reality, making the system more humane and efficient without unduly burdening those who feared change. That they managed to pass and implement such a reform in the face of hysterical opposition is a historic triumph, one with which the opposition, five-and-a-half years later, has not come to grips.

Must-Read: Paul Krugman: Obamacare and the Cockroaches

Posted on by Brad DeLong

Must-Read: Still looking, without success, for conservatives at think tanks willing to be reality-based on health care…

Paul Krugman: Obamacare and the Cockroaches: “Zombie ideas are claims that should have been killed by evidence…

…but just keep shambling along, like the notion that vast numbers of Canadians, frustrated by socialized medicine, come to America in search of treatment…. Cockroaches are claims that disappear for a while when proved ludicrously wrong, but just keep on coming back…. The notion that Obamacare hasn’t really reduced the number of uninsured as a cockroach… [and] is back, as Charles Gaba notes. He says that Avik Roy’s latest is embarrassing, which I guess it is–but how much more embarrassed can the guy who did the totally spurious work on ‘rate shock’ get? I’d say, rather, that the latest is impressive in the way it uses multiple layers of misrepresentation to obscure what you might have thought was too obvious to deny…

Obamacare and the Cockroaches The New York Times

Must-Read: Zack Cooper et al.: The Price Ain’t Right? Hospital Prices and Health Spending on the Privately Insured

Posted on by Brad DeLong

Must-Read: Yes. Constraining hospital and doctor-group market power is very important to creating a more efficient health-care system. Why do you ask?:

Zack Cooper et al.: The Price Ain’t Right? Hospital Prices and Health Spending on the Privately Insured: “Insurance claims data for 27.6 percent of individuals with private employer-sponsored insurance in the US…

…between 2007 and 2011… [shows] the variation in hospital prices within and across geographic areas…. First, health care spending per privately insured beneficiary varies by a factor of three across the 306 Hospital Referral Regions (HRRs) in the US…. The correlation… [with] Medicare… across HRRs is only 0.14. Second, variation in providers’ transaction prices across HRRs is the primary driver of spending variation for the privately insured, whereas variation in the quantity of care provided across HRRs is the primary driver of Medicare spending variation…. Third, we document large dispersion in overall inpatient hospital prices and in prices for seven relatively homogenous procedures…. Finally, hospital prices are positively associated with indicators of hospital market power… prices in monopoly markets are 15.3 percent higher than those in markets with four or more hospitals.

Must-Read: Ezra Klein: Republicans Think America Is Doing Terribly, but It Isn’t

Posted on by Brad DeLong
Journalist, columnist, and blogger Ezra Klein. (AP Photo/Charles Dharapak)

Must-Read: America looks bright today primarily from the perspective of the rich, the techie, and those who have benefitted from ObamaCare’s coverage expansion. That is not most Republicans. The lived experience of most non-poor–and many poor–Republicans in the Bush 43 and Obama years is not of participating in the second tech bubble, or even benefitting greatly from ObamaCare because their local political rulers and masters have not implemented it. And they couldn’t care less that Greece and Italy and France and Britain are doing even worse:

Ezra Klein: Republicans Think America Is Doing Terribly, but It Isn’t: “Anyone watching the fourth Republican debate would be excused…

…for thinking America is mired in a deep recession–that the economy is shrinking, foreign competitors are outpacing us, more Americans are uninsured, and innovators can’t bring their ideas to market…. They would be surprised to find that unemployment is at 5 percent, America’s recovery from the financial crisis has outpaced that of other developed nations, the percentage of uninsured Americans has been plummeting even as Obamacare has cost less than expected, and there’s so much money flowing into new ideas and firms in the tech industry that observers are worried about a second tech bubble.

This beats even the markers the Republican Party established. In 2011, for instance, Mitt Romney made headlines when he promised that ‘after a period of four years, by virtue of the policies we’d put in place, we’d get the unemployment rate down to 6 percent–perhaps a little lower.’ We’re now quite a bit lower than 6 percent, and in less than four years…. The economy simply isn’t as bad as they’re making it out to be….

[And] Republicans are increasingly focused on economic problems they don’t really know how to solve, and don’t have much credibility to say they will solve…. Republican tax plans will sharply increase after-tax inequality, and they will do so in the most obvious and mechanical of fashions…. Republicans have entered into a disastrous arms race of ever more expensive tax plans that they have no way to pay for…. Republicans are stuck between a description of the economy that seems increasingly detached from the reality of the recovery and a set of economic plans that actually worsen many of the problems Republicans say they want to solve. It’s a pickle.