Health Care Compact

Greg Sargent says president Obama has won the debate over Obamacare because the Republicans admit that by repealing it they would have to replace it; and in replacing it address the same issues Obamacare does.

But it may also be that Republicans are running into the same old problem: There just isn’t any real policy space for an alternative that would meaningfully accomplish what the law accomplishes. Indeed, along these lines, one GOP aide was remarkably candid in an interview with Sahil Kapur:

One congressional GOP health aide, who was granted anonymity to speak candidly, said his party is as determined as ever to fight Obamacare, and will remain so as long as it exhibits failure. He said devising an alternative is fraught with the difficulty of crafting a new benefits structure that doesn’t look like the Affordable Care Act.

“If you want to say the further and further this gets down the road, the harder and harder it gets to repeal, that’s absolutely true,” the aide said. “As far as repeal and replace goes, the problem with replace is that if you really want people to have these new benefits, it looks a hell of a lot like the Affordable Care Act…To make something like that work, you have to move in the direction of the ACA. You have to have a participating mechanism, you have to have a mechanism to fund it, you have to have a mechanism to fix parts of the market.”

The whole debate is missing three big words. Health. Care. Compact. Sargent is right to say that repealing any big Democratic health program and replacing it with a big Republican Health Care program out of Washington is likely to create another monster with family similarities.

That is precisely the reason why the Health Care Compact remains the most innovative approach to the health care policy problem to date.

The problem for the HCC is to cast itself as a viable alternative to these failed dinosaurs. The key problem the HCC must overcome is the objection that “it’s a good idea but it will never fly”. This has to change to “it’s a good idea and therefore it will fly, because the failed approach of centralized bureaucratic health will never get off the ground.

Health Care Compact

Jason Millman at the Washington Post tries to make sense of data that he cannot comprehend. “Why would a person sign up for Obamacare but not pay the premium?” His answer is that they’re going to pay the premium -- eventually -- because anything else is nonsensical.

Are these late-comers more likely to pay their premiums? At this point, it’s a guessing game. The head of Minnesota’s exchange, Scott Leitz, told a Congressional oversight panel today that 95 percent of exchange signups have paid, and he expects that number to grow higher. The 95 percent rate is for people who had coverage starting Jan. 1 and Feb. 1, Minnesota exchange spokesman Joe Campbell told me.

So why does Leitz think that number will grow higher?

“Past experience has shown us – by having one of the lowest uninsured rates in the nation prior to the enactment of the ACA – people in Minnesota want to be insured,” Campbell said. “It was an opinion, not a prediction.”

But that doesn’t answer the question of how many have actually paid. Blue Cross says “‘80-85’ percent of newly enrolled individuals buying plans under the Affordable Care Act are paying their premiums.”

The figure was confirmed by Forbes this morning and is slated to be announced later today by the Chicago-based trade association for the nation’s Blue Cross and Blue Shield plans. The results, which confirm from a survey of most Blue Cross participating on exchanges, are as of Feb. 1.

The news answers critics of the health law who have criticized the Obama administration for not telling people how many of those who have signed up are actually paying their premiums. President Obama yesterday announced that more than 7 million Americans have signed up for coverage to plans via state or federal marketplaces known as exchanges.

So which is it? A “guessing game”? Ninety five percent or eighty percent? Millman tries to guess why on earth a person might not pay for goods he ordered, listing the possible reasons.

  • Someone might have also pursued off-exchange coverage

  • An offer of employment insurance after signing up

  • Decided it wasn’t affordable

  • No browsing function for health plans in’s early days

  • The way the process is divided between the exchange and the insurer

  • People may still eventually pay the premium

Of the reasons given “decided it wasn’t affordable” is the most significant. It is also substantially equivalent to “someone might have also pursued off-exchange coverage” and “an offer of employment insurance after signing up” in that the merchandise offered did not seem worth it.

“Decided it wasn’t affordable” is also the most probable for individuals who could not previously afford coverage. The Obamacare plans have high deductables and draconian penalty clauses for those who do find a good job because the subsidy payback clauses are severe.

Taken together they suggest that Obamacare is not a done deal. Any commercial vendor looking at Obamacare data would conclude that it was a turkey rather than a glorious flower waiting to unfold.

Health Care Compact

Grace Marie-Turner of Forbes tries to disentangle the numbers lumped into the single “7 million” person enrollment claim of Obamacare. When the administration claims it has enrolled 7 million do they mean new enrollees or the previously insured re-upping? Or is it some combination of the two?

Since at least six million people lost their individual private plans – and the doctors and hospitals they liked – because of ObamaCare, the enrollment numbers are nothing to boast about.

The 7 million number came from an early Congressional Budget Office estimate.  The CBO needed to calculate how many people it believed would gain private health insurance in the exchanges in the first year and therefore what the cost of the taxpayer subsidies would be. The CBO also assumed that the majority of those in the exchanges would come from the ranks of the uninsured.

But, as we now know, as many as two-thirds of those buying coverage in the exchanges were driven out of their private plans because they didn’t comply with the mountain of ObamaCare mandates.  Only about one-third of those enrolling in the exchanges were previously uninsured, based upon a yet-unpublished but reported study by the RAND Corporation.

An estimated 86% of those enrolled in the exchanges who previously had insurance have paid their premiums.  But the story is different for the remainder of enrollees who had been uninsured. Only about half of them are expected to pay their premium and therefore will be officially enrolled.

The numbers can be computed from this data.  We have 7 x ⅓= 2.33 million uninsured of which ½ have paid their premiums = 1.67 million insured who were previously uninsured. And then we have 7x ⅔ = 4.67 million * ⅔ = 3.11 million of insured who were formerly insured. Adding the two numbers we have 1.67 + 3.11 million = 4.78 million insured.

But six million lost their individual private plans due to new requirements, so the net loss is 6 million - 4.78 million or 1.22 million, for the cost of billions of dollars in Federal expenditure and lost time, not to mention the imposition on harried private sector accountants and insurance companies.

Marie-Turner concludes:

So, to recap: Obamacare has extended coverage to a far smaller portion of the uninsured than expected, caused millions of others to lose coverage, raised out-of-pocket costs for many middle-income consumers, diminished patient choice of doctors and hospitals and exposed Americans to future premium hikes.