I’m reading through the Manhattan Institute’s Obamacare replacement plan so you don’t have to. A couple of things to note. The first and most important is that it diagnosises the problem as too much regulation of insurance companies and strongly suggests going back to pre-PPACA will lead to an incredible increase in freedom. It may if you are young, healthy, male and never will see those three attributes change (one is highly problable static, the other two are guaranteed to change).
Secondly, here are a few things I’ve picked up on the skim read of Part 1:
- Underwriting or more specifically the string “underwr*” is mentioned once in 68 pages. Underwriting is the key concept of accessibility. Community Rating is mentioned as a source of evil as that allows the sick, old and female to get better rates than they would have had under medical underwriting at the cost of the young, healthy and male.
- Stupid facutal errors. PPACA requires a premium spread of no more than 3:1 for ages 21 to 64. Manhattan Institute uses on p. 26 a claim about age rating applying to a 19 year old
- misunderstanding of how insurance works
P. 24 They required all plans to cover services (“essential health benefits”), such as drug addiction therapy, that few people might need: in effect, requiring all insured individuals to subsidize those services on behalf of the minority who use them.
NO SHIT, that is how insurance works. Most people pay in and get very little to nothing paid out. Most of the pay-out goes to a small minority of people who have bad things/bad luck happen to them. The point of EHBs to make sure there is no race to the bottom on benefit configurations that discourage the use of services that have significant net social savings.
- Interesting use of comparison areas
Do counties pay premiums or do people pay premiums? Simple question. Should we care more that there are 100 counties with under 2,500 people in each county could see higher rates than a single county with 2 million people in it seeing on average lower rates? I’m more concerned about people, but look at this doozy on .P. 25
As noted above, and in Figure 10, a Manhattan Institute study found that the average
county will experience premium increases of 49 percent in the individual market.19
Remember, this is the study that I called premium bullshit as it looked at plans like the following:
Arkansas: $26 per month for a $25,000 deductible 23% applicants denied. 28% uprated.
Ohio: $25,000 deductible, 19% denied, 17% uprated.
- Cut benefits and subsidies massively on p. 26:
In order to provide consumers with more affordable choices, the Universal Exchange Plan actuarial value tiers are 40, 55, 70,and 85 percent, respectively, for Bronze, Silver, Gold, and Platinum.
That would mean the Bronze deductible would be, for a single indivudal, someplace in the $9,000 to $12,000 range based on back of the envelope calculations…
- Subsidies would get a whole lot smaller as well:
Under the ACA, the benchmark plans used to determine subsidies are Silver plans with relatively low deductibles and comprehensive benefits. These plans are the opposite of consumer-driven health plans. Under the Universal Exchange Plan, the benchmark plan has an average deductible of approximately $7,000 per individual per year, or $14,000 per family per year. Annual growth in the benchmark deductible would be linked to the Consumer Price Index plus 1 percent (CPI+1%).
WTF — The cheapest Silver plan in my zip code has a deductible for a single person over $2,500 and an OOP max of $4,000. Going back even six years, the panacea of health care cost control was “consumerism” with $1,500 to $2,500 deductibles supported by HSAs. We’ve gotten to that point fairly easily. Going to $7,000/year deductibles might be cheaper premiums but given the Rand Health Insurance Study, it guarantees a whole lot more suffering and a whole lot more needless deaths because preventative care (which Roy chops as an EHB) is delayed and acute care becomes emergency care needs. Furthermore, look at the difference in how subsidies are calcuated. Currently under PPACA, the Feds bear the risk of increased cost growth above benchmarks as the subsidies are tied to individual income. If I am subsidy eligible, my income remains static between year 1 and year 2, then my health insurance premium that I pay remains static as well assuming the benchmark Silver increased in price year over year. Under Roy’s plan, my health insurance premium costs increase. Nasty little change to shift risk onto the individual instead of society.
- Big premium support subsidy cuts.
P. 26Under the Plan, those eligible for premium support subsidies are eligible, on average, for a subsidized contribution to a health savings account of approximately $1,800 per individual per year, or $3,600 per family, also growing at an annual rate of CPI+1%…. Under the Universal Exchange Plan, eligibility for subsidies ends at 317 percent of FPL.
- Open Enrollment reform
This actually makes a decent amount of sense if one is looking for an individual mandate work-around. I would make this trade if I could get a Halbig proofing and a couple of other things in exchange. There are a lot of ways to deal with the free-rider problem. Mandates and open enrollment are one of them. Late enrollment penalties are another. I think this is mainly a shiny objective for conservatives that as long as the free rider problem is addressed somehow, it is not too consequential how it is addressed.
Beginning in 2017, the Plan would reform open enrollment such that it takes place for a six-week period every two years. Under this system, individuals who choose to forego coverage could do so without paying a fine; however, they could not simply enter and exit the system at will and take advantage of consumer protections such as coverage for preexisting conditions, and cross-subsidies such as community rating.
- Go fuck yourself with a stalk of broccoli
The second is that, despite the mandate’s weakness, it represents an unprecedented—if not unconstitutional—expansion of congressional power: compelling individuals to purchase a privately delivered service.
The Supreme Court disagrees with you. Would you support a public option? No, you just don’t want people to get coverage who need coverage.