2013
Following is what Paul Krugman wrote recently in the NYT. It appears Mr Krugman has given up economics in favor of being a politician. What Mr Krugman conveniently avoids mentioning in his example is that Massachusetts has been struggling with health care costs to such an extent it has passed legislation that attempts to limit the amount spent on health care in that state and to somehow penalize doctors who generate too much spending. About now you should be asking exactly how that will all be accomplished without limiting the care provided or driving providers out of the state or why such a move should be necessary in the absence of a “train wreck.”
Back to Krugman; isn’t it interesting that in one sentence he is able to use the phrase “all Americans should have access to affordable insurance” and in another “to prevent the insurance “mandate” from being too onerous, there should be subsidies to hold premiums down as a share of income?” If insurance is to be made affordable, why the need for subsidies – in some cases even for families earning substantially above the national median. The answer of course is that Obamacare meets its own definition of “affordable” simply by using subsidies, not by changes in the system that actually lower costs (I must recognize serious attempts are being made for Medicare, but success is a long way off if it occurs). A daunting challenge I admit and one most Americans don’t want to face.
What Mr Krugman relates is Obamacare’s palliative care, not actually addressing the problems with the system of health care delivery in the US. By expanding coverage first and by masking the unaffordable state not of insurance premiums, but of underlying health care claims, Obamacare worsens the problem over the next several years.
Mr Krugman and other liberal pundits have delighted in bashing insurance companies and their premiums for the last few years thereby deceiving an already under informed public. Mr Obama convinced many people the problem was profits and CEO pay and that nothing really needed to change … if you like the plan you have, you can keep it … nobody should come between you and your doctor. Then there was a great expansion of benefits and other mandates and the message there would be no adverse impact on premiums. Lately we are inundated with “evidence” of Obamacare working to cut premiums through competition with the accompanying overlooked fact that the savings are not comparing the same plans.
Some background: Although you’d never know it from all the fulminations, with prominent Republicans routinely comparing Obamacare to slavery, the Affordable Care Act is based on three simple ideas. First, all Americans should have access to affordable insurance, even if they have pre-existing medical problems. Second, people should be induced or required to buy insurance even if they’re currently healthy, so that the risk pool remains reasonably favorable. Third, to prevent the insurance “mandate” from being too onerous, there should be subsidies to hold premiums down as a share of income.
Is such a system workable? For a while, Republicans convinced themselves that it was doomed to failure, and that they could profit politically from the inevitable “train wreck.” But a system along exactly these lines has been operating in Massachusetts since 2006, where it was introduced by a Republican governor. What was his name? Mitt Somethingorother? And no trains have been wrecked so far.
To paraphrase Mark Twain, the reports of the success of Obamacare have been greatly exaggerated. Or better still for the “experts” from Mark Twain, “Get your facts first, then you can distort them as you please.”
Lest you think I am merely displaying sour grapes read this from a former Obama advisor on health care.
One final thought on all this optimism, affordable health insurance has been defined. It’s equal to 9.5% of your household income Plus your out of pocket which can be as much as $6,350 for an individual, or $12,700 for a family. So, in the world of health care reform a family earning $100,000 a year could spend $22,000 a year on “affordable” health care … now that’s a train wreck, Mr Krugman … or should we just make it all go away and increase the subsidies?
QUINNSCOMMENTARY 
Have you ever considered creating an e-book or guest authoring on other websites?
I have a blog centered on the same information you discuss and
would love to have you share some stories/information.
I know my subscribers would enjoy your work. If you are even remotely
interested, feel free to send me an e mail.
LikeLike
You are right to point out that Massachusetts effectively ended the Romneycare healthcare reform experiment in 2012. But the bad news for those who want to compare what has happened in Massachusetts’ 25 years of healthcare reform attempts to the Patient Protection and Affordable Care Act, the news is even worse:
1. Our new price controls were also passed by Governor Dukakis in 1988 and then repealed in the early 90s after multiple delays granted by the state (sound familiar?)
2. We gave individuals guaranteed issue in the late 1990s and the number of people insured individually dropped from over 2% of the population to under a half a percent as premiums rose dramatically (and they think that won’t happen with PPACA?). This problem was solved later by combining the individual market with the small group market so that individual prices for the small group buying such insurance went down and the premiums for people in small groups went up proportionately. (This is the “dramatic” drop in individual rates in Massachusetts often cited by people like Krugman. It really had nothing to do with RomneyCare other than it was passed thru the Massachusetts legislature at the same time.) As an aside, I believe people who can’t otherwise get insurance for health reasons, should get health care. People like Krugman continuously mix up universal health care and universal healthcare insurance and make the illogical claim that if you are against one, you are against both (not to mention that you are against little babies and old people and otherwise are just a despicable person)
3. through 6. That brings you to the various comparisons of RomneyCare with PPACA. This is numbered three through six because Massachusetts tried three other revisions to RomneyCare before the price-control fix in 2012. If you want more details begin with Romney’s original proposal (see http://www.boston.com/news/globe/editorial_opinion/oped/articles/2004/11/21/my_plan_for_massachusetts_health_insurance_reform/?page=full).
Romney’s 11/2004 plan was based on the premise that Massachusetts would require uninsured “freeloaders” to get insurance. That pretty much failed because the state found there were very few freeloaders. People in Massachusetts love healthcare insurance and have always had it. (see any version of census.gov going back to when it first started measuring such things). Anyone that could afford healthcare insurance had it before RomneyCare was passed.
Using money from the other 49 states given us by the Medicaid bureaucracy, Massachusetts did give Medicaid or Medicaid Lite (Commonwealth Care) to 400,000 people (5% of population) but many of them have already dropped it and over 200,000 people who are eligible have still not signed up. This is apparently because so many doctors do not take it (see ongoing Mass Medical Society surveys, most recently July 2013). As a result, basically Massachusetts’ uninsurance rate — as of two years ago — is where it was before RomneyCare started seven years ago (I am not exactly sure where we stand today because the state of Massachusetts stopped releasing all the unfavorable data about Romneycare in 2011.)
The second part of the Romney’s 11/2004 proposal was to cut fraud and waste (sound familiar?). You gotta get those dastardly blood-sucking for-profit insurance companies, right? Except Massachusetts residents were (and mostly still are) insured almost exclusively by non-profits. And most of our hospitals are non-profits. However as an unintended consequence of RomneyCare, for-profit hospitals and insurers have entered the Massachusetts market for the first time (the government is handing out money in advance to give people insurance the people don’t use, the perfect business model for an insurance company or any company). The biggest of these for-profits, Centene of Missouri, immediately hired the head of the Massachusetts insurance exchange to run its Massachusetts insurance operation, which got the Beacon-Hill/for-profit-healthcare revolving door going in a big way.
Most of the fraud and waste part of the 11/2004 Romney proposal was not passed. Thousands of people from across state lines get free healthcare at Massachusetts hospitals through our free care pool. Free care pool spending that was supposed to go down to zero to pay for the subsidies used to pay for RomneyCare insurance is almost back to pre-RomneyCare levels. (This is not mostly from out of staters. The major driver increasing the free care pool expense is that people with subsidized RomneyCare insurance don’t want to stay in their new-lousy-insurance networks and prefer providers near their neighborhoods or the providers they have always used. ER usage is also up, exactly the opposite of the theory behind Romneycare ((and PPACA, right?))
In addition, more and more questionable mandated benefits have been forced on to the cost of private insurance and Medicare supplement users (meaning almost everyone on Medicare in Massachusetts). Premium costs have skyrocketed for everyone in the state while co-pays and tiered networking has also been added.
The third and most important leg of Romney’s plan — lower cost care — is what really failed. Again, our healthcare in Massachusetts was always expensive (can’t blame that on Romney) but RomneyCare made it worse. That’s why the legislature enacted price controls in 2012, effectively ending RomneyCare.
But interestingly, the 2012 legislation effectively ending RomneyCare put in the tort reform that Romney originally proposed in 2004 but that was defeated by the Democratic legislature in 2006. And in 2010 the Democratic governor proposed and the Democratic legislature passed health-benefits “reforms” for public employees that are more stringent than in Wisconsin. (And they call us progressives.)
(Notice I use the term “effectively” a few times. RomneyCare officially ends this year with the initiation of the Obamacare insurance part of PPACA. Our employer mandate was repealed last week. We are losing our “merged market rating system” because of PPACA, increasing many people’s premiums back to pre-RomneyCare levels. Many other so-called “reforms” are long gone.)
So everyone hoping that the RomenyCare experience in Massachusetts bodes well for the PPACA better find a better comparative
Thank you for letting me vent
LikeLike
“One final thought on all this optimism, affordable health insurance has been defined. It’s equal to 9.5% of your household income Plus your out of pocket which can be as much as $6,350 for an individual, or $12,700 for a family. So, in the world of health care reform a family earning $100,000 a year could spend $22,000 a year on “affordable” health care … now that’s a train wreck, Mr Krugman … or should we just make it all go away and increase the subsidies?” What is the cost of the family coverage in this example? A family earning $100,000 a year could be charged 100% of the premium/cost of coverage (affordability only applies to the offer of coverage, not actual enrollment), plus, of course, be subject to the $12,700 out of pocket expense maximum. Would have posted this, but there was no link. Jack
________________________________
LikeLike