I know this is almost nutpicking, but the Wall Street Journal editorial page either can’t do basic subtraction or is suffering from amnesia:
The health-care law was generated by an administration promoting government as the solution to inequality, yet the greatest irony of ObamaCare is what will undoubtedly follow as a long-term, unintended consequence of the law: a decidedly unequal, two-tiered health system. One will be for the poor and middle class, and a separate system will be for those with the money or power to circumvent ObamaCare.
With the Affordable Care Act, the government has dramatically expanded its authority as final arbiter over health insurance and consequently over access to medical care. After the law’s Medicaid expansion and with the population aging into Medicare eligibility, the 107 million under Medicaid or Medicare in 2013 will skyrocket to 135 million five years later, growing far faster than the ranks of the privately insured.
Besides the fact that I love how he elides the aging of the population into Medicare as a bad thing, the thing I love about this excerpt is the assumption that the United States had a one tier system of healthcare pre-Obamacare.
We had a four tier system with some caveats and carveouts in 2009. We are moving towards a three tier system with some caveats and carve-outs under Obamacare.
In 2009 and 2014, the first tier was the tier for the rich and very well insured. Senator Ted Cruz’s $40,000/year family policy that his wife is the primary contract holder for is an example of this tier. He can go to whatever provider he wants without worry, and his wait times will be minimal. If he blows out his elbow while pulling his head out of his ass, the distinguished Senator from Texas can go to Dr. James Andrew, the Tommy John specialist for a repair. If his kids get cancer, they can go to whatever clinic they want to in the United States and get top line treatments that cost more than my family’s annual income for an extra three or four months of life. This type of insurance is fundamentally the same between 2009 and 2014. The big difference is that some of the premiums will be taxed in the near future due to Obamacare instead of being entirely tax free.
The second tier of 2009 coverage was solid employer provided group insurance and solid individual coverage. It was possible to have solid individual coverage, you just had to be lucky. This tier of coverage has some limitations, it has some deductibles and co-insurance and it is the most common tier of coverage. Employer provided insurance also has massive explicit (employer provider) and implicit (tax advantages) subsidies. In 2009, this tier was a shrinking share of coverage even as it is the dominant share of coverage for people under 65. Now the Exchanges and the threat of the employer mandate is growing this tier of solid, private market coverage.
The third tier in 2009 was government insurance provided through a variety of programs. The big programs are Medicare, Medicaid, CHIP and the VA. Medicaid was income, asset, and “deserving” poor status limited. Working adults without insurance and low incomes were out of luck in most states for Medicaid. CHIP had expanded but was not all inclusive for all kids. Medicare and VA were functioning reasonably well.
Now, Medicaid in half the states is neither asset nor “deserving” poor status dependent; it is just income dependent. CHIP was expanded in the winter of 2009. VA has not been significantly altered. Medicare’s drug benefit has been enhanced, and Obamacare is equalizing the risk adjusted payment rates for traditional fee for service Medicare and Medicare Advantage as well as engaging in massive experimentation on new payment models.
The fourth tier in 2009 was the “You’re on your own” tier. This was for people who either had no insurance or had insurance that was so skimpy it could not protect people from financial ruin from a moderate size medical event much less a major medical problem.
The fourth tier is being phased out in half the states. The long run goal is for most of the people in this tier to move to either the third tier via Medicaid or CHIP or the second tier by enabling community rated non-medically underwritten policies to be sold on the Exchanges. The first tier will shrink due to the Cadillac excise tax, and the fourth tier is larger than it should be due to the sadists on the Supreme Court and sociopaths in the Republican Party, but the long term goal and program design is to move towards a three tier instead of four tier system.