The ACA and throwing money at a problem

Andrew Sprung, guest-posting at the Incidental Economist, has reviewed an interesting little e-book that is on my to read list:

ObamaCare is a Great Mess: A View of the Affordable Care Act Without Partisan Blinders & How to Fix It. By Jed Graham. Amazon, June 2015

Mr. Graham writes that there are a couple major problems with the ACA going forward.  The first is that the subsidies are not rich enough to be attractive to people who make more than 200% FPL.  Secondly, the subsidies are only sufficient to cover Bronze plans with big deductibles instead of cost-sharing Silver plans with low deductibles but 15% higher premiums.  Thirdly, the subsidies end too soon.  While finally the plans are too costly for young people which is leading to a sicker and older risk pool than projected.

Andrew has done a good job of dismantling the second point as he has been pointing out that the vast majority of people who are eligible for cost-sharing Silver plans are buying those plans as the deductibles are far more reasonable than slightly cheaper Bronze plans.

However, the other problems have a very simple solution.  Shovelling money at them.  The subsidy formula could theoretically be tweaked so that slope upwards of the personal contribution at a given income level is far less, the base line plans could be reset so a Silver is 75% actuarially value where the additional actuarial value is paid for by subsidy dollars instead of individual dollars.  The subsidy formula could be easily tweaked so that no family pays more than X% of their income for a QHP without regard to the income level so there is no income cliff/work disincentive at 399.99% FPL.

All of those are fairly simple tweaks that are not disruptive to the fundamental delivery of health care and health insurance to the greater population.  And these are all problems where throwing money at the problem is a valid and viable solution.

We did not get these policy tweaks in PPACA because the Democrats, and more importantly, the marginal decision makers in the Democratic caucs were petrified of writing a bill with a “bad” CBO score.  There was a line of thought that a “responsible” and “small” bill would help preserve a majority or at least more of the marginal district Democrats.  Going bigger would have produced a better bill ( and if the bill contained more cash going out the door in 2012/2013, a slightly better economy).

In reality, Democrats who represented significantly Republican leaning districts as the country became more polarized had to count on two things to stay in office.  The first was that any particular opponent was a kid-diddling goat fucker.  The second was a good economy with significant wage gains.  A good CBO score on a polarizing bill is about the ninety-ninth ranking aid to re-election.  A “responsible” bill pandered to elite consensus without actually getting any additional people to vote for “responsible” Democrats.


54 replies
  1. 1
    JPL says:

    The republicans don’t want to fix it. Affordability is not part of their plan.

  2. 2
    Bobby Thomson says:

    Keynes wept.

  3. 3

    I know I’ve said it before, but it’s very frustrating that in our current political climate, we can’t take the framework that PPACA set up and move forward with it. Having actually read the damn thing, it’s pretty clear that one of the long-term goals is to squeeze out for-profit insurers and for-profit providers by slowly choking off the profits to be had. We really should be moving forward on that goal and on the goal of making coverage as universal and affordable as possible, but instead we keep getting hassled by Kill The Bill activists from both right and left who insist on trying to blow the whole thing up just as we’re making progress. It’s just so fucking annoying.

  4. 4
    goblue72 says:

    The real problem is that Bernie Sanders was rude to a couple of protestors.

  5. 5
    Eric U. says:

    @Mnemosyne (iPhone): the “kill the bill” activists on the left look pretty pathetic at this point. Ok, so they look like loons. We already knew the people that want to kill it on the right are soulless assholes. The people that propose technocratic fixes to make it better are just cuter than a button

  6. 6
    Chris says:

    So when are we going to be able to start the tweaking/money shoveling?

  7. 7
    Bill Arnold says:


    So when are we going to be able to start the tweaking/money shoveling?

    (Rhetorical question I know.)
    Right after the next wave election, where Democrats gain control of the House, gain control of the Senate (60 seats plus a few more to control the waverers.) and have control of the Presidency, and perhaps also replace a Supreme Court member. (Plus gain some increased level of control of state governments.)

  8. 8


    When the Democrats have control of both Congress and the presidency at the same time. So, in about 20 years, more or less.

  9. 9
    WereBear says:

    @Chris: As soon as enough Republicans are called “home.”

  10. 10

    “Why should we throw money at problems? Because that is what money is for.” –Vonnegut

  11. 11

    @Major Major Major Major:
    That sounds about right to me. People can get so committed to saving money that they forget the whole reason for saving money is to have some to spend when needed. It’s a pathology.

  12. 12

    “However, the other problems have a very simple solution. Shovelling money at them.”

    Who says the Democrats out out of new ideas?

  13. 13

    “First, I will not sign a plan that adds one dime to our deficits – either now or in the future. I will not sign it if it adds one dime to the deficit, now or in the future, period. And to prove that I’m serious, there will be a provision in this plan that requires us to come forward with more spending cuts if the savings we promised don’t materialize.” – Obama then.

    “Shovel some money at it!” – Obamacare apologists now.

  14. 14
    Omnes Omnibus says:

    @Eric Lindholm: Are you imply some contradiction between the two statements? Because, if you are, there are multiple ways in which you are wrong.

  15. 15
    Richard Mayhew says:

    @Eric Lindholm: When the billed passed it was projected to have saved net $120 billion

    Throwing another $80 billion or $100 billion at higher subsidies would have made the bill better and kept the quote that you are using to be true.

  16. 16
    Baud says:

    @Omnes Omnibus:

    He’s implying that he hates Democrats. No other justification needed.

  17. 17

    @Richard Mayhew: Throwing another $100 billion at Obamacare would have made it cost less?

    You people really live in your own world.

  18. 18

    Don’t feed the troll kids.

    ETA: feed me, I’m hungry

  19. 19

    @Eric Lindholm:

    Hmm. Shovel money into healthcare for Americans, or shovel money into the bottomless pit of Iraq by re-starting the war over there?

    You guys can’t pretend to be the “party of fiscal responsibility” anymore after what you pulled during the Bush years. So now the only question is what’s a better use of a trillion dollars — getting healthcare for Americans or bombing Iraqis?

  20. 20
    Richard Mayhew says:

    @Eric Lindholm: No,

    $120 billion net savings as projected by CBO in March 2010

    In the counterfactual world, throwing another $100 billion in subsidies would still have led to a net savings over no bill.

    There was a 119 billion dollar cushion between actual deficit reduction and rounding error budget neutrality. Using some of that cushion would have improved the bill and still have maintained a lower level of deficit reduction. Both things can be true at the same time.

    Learn to read.

  21. 21
    goblue72 says:

    @Eric Lindholm: To paraphrase The Trump – “You’re a LOOOOOOSER. A LOOOOOOO-SUH. What kind of LOOOOOO-SUH names his vanity blog ‘Viking Pundit’ but has no audience. A LOOOOOOSER, that’s who.”

    Seriously, you’re a nut job who thinks Hillary Clinton belongs in prison over this made-up email “scandal”?


  22. 22
    Kelly says:

    If we had a smoother income stream we’d be on a 200% Silver Plan. However it’s extraordinarily lumpy so last year and this we’re on Medicaid next year most likely no subsidy. Our next big lump is due right around December or January. Falling in December is likely best since Oregon has forgone claw back but I’m not sure if that will mess us up for 2016 insurance applications. My wife has preexisting conditions so Obamacare was a big win for us even if we have to pay full freight next year. Thanks for all the excellent info.

  23. 23

    @Major Major Major Major:

    But I have some tasty treats in my pocket!

  24. 24
    goblue72 says:

    @Eric Lindholm: When you blog in your pajamas in your mother’s basement, do you wear a giant helmet with Viking horns? Do ya, LOOOOOSER?

  25. 25
    trollhattan says:

    @Eric Lindholm:
    That’s right, you live in my world, and you’re fired!

  26. 26
    agorabum says:

    A responsible bill pandered to elites – but it was the ‘elite’ congressmen in the House and Senate, who, while stupid, still had to be pandered to.
    The Congressmen’s belief was wrong, but the bill was crafted in a way to let them vote for it based on their wrong belief. That is the sad reality – it’s not so much what is popular among the ‘people’ – to become a law it must be sufficiently popular in that wretched hive of scum and villainy that is our Congress.
    So not the best bill, but it remains a BFD

  27. 27


    He should take up Viking knitting instead. At least he’d have a nice sweater at the end of it:

  28. 28
    Brachiator says:

    @Bill Arnold:

    Right after the next wave election, where Democrats gain control of the House, gain control of the Senate (60 seats plus a few more to control the waverers.) and have control of the Presidency, and perhaps also replace a Supreme Court member. (Plus gain some increased level of control of state governments.)

    Is that all it will take? Whew. I was worried for a moment.

    More seriously, these are pretty serious barriers. And it will take some tough strategy, and some hard-headed honest redistricting, to fix some of the Congress and state level problems.

    However, the other problems have a very simple solution. Shovelling money at them.

    Federal budgets are not infinite. There has to be a reasonable expectation that the shovelling will achieve the desired goal.

  29. 29
    Thoughtful Today says:

    Erm …

    Right-wingers have been shoveling piles of money into private, for profit insurance companies and claiming that ‘fixed’ healthcare.

    Instead, there’s reportedly 30 MILLION people still lacking healthcare in America.

    Meanwhile, bureaucrats who get paid from the current Rube Goldberg corporate insurance system keep claiming it’s inconceivable that the superior universal healthcare systems throughout Europe, Canada, and Japan are possible in America.

    ^ Nonsense.

    Support Universal Health Care for Everyone.

    It’s the moral thing to do.

  30. 30
    Baud says:

    @Thoughtful Today:

    Support Universal Health Care for Everyone.

    I wish I had thought of that.

    bureaucrats who get paid from the current Rube Goldberg corporate insurance system

    Like who?

  31. 31
    Patrick says:

    @Major Major Major Major:

    Don’t feed the troll kids.

    They are funny, though, aren’t they? During the Bush years the deficit didn’t matter. They took Clinton’s surpluses and turned them into huge deficits. With the idiotic Iraq war, they were so eager to spend money, that every six months they would unanimously pass a supplemental funding bill to fund the war.

    Hell, they are more eager to rebuild Iraq rather than spending a penny on US citizens and their health care. Country first, my a**!

  32. 32

    @Bill Arnold:

    Right after the next wave election, where Democrats gain control of the House, gain control of the Senate (60 seats plus a few more to control the waverers.) and have control of the Presidency, and perhaps also replace a Supreme Court member.

    I think it would be more fair to say that it will happen when there’s a governing majority in Washington more interested in fixing Obamacare than in political grandstanding over it. The situation you described is one way for that to happen, but it could also result from Obamacare becoming popular enough that the Republicans want to get some credit for improving it, or from passing the Wingularity and having some sanity return to the Republican party. I know, those seem less likely than a Democratic wave election, but they theoretically could happen.

  33. 33
    Thoughtful Today says:


    Start with: [Rick Scott Medicare]:

  34. 34
    Richard Mayhew says:

    @Thoughtful Today: Are you still stuck in the false belief that single payer is the only way to get to universal coverage?

    If so, please STFU.

    If not, let’s talk about the trade-offs inherent to the US vs. Canada vs. UK vs. France vs. Germany vs Japan systems and see what can be stolen and implemented here.

  35. 35
    Thoughtful Today says:

    I’ve done the math.

    Medicare’s overhead is less than 5%. (3% by some measures.)

    Assuming a corporation can be as efficient as the government {cough}, that means that the profiteering, even with the A.C.A.’s restriction to only 15% to 20% of total revenue, is HUGE.

    It’s an easy 10% profit for corporate insurers.

    Out of every $10 BILLION spent in healthcare, the corporate leaches get to keep at least $1 BILLION.

    Corporate insurers leach BILLIONS out of the healthcare system.

    Stop throwing money at corporate leaches and spend it on a Universal Health Care sytem.

  36. 36
    piratedan says:

    @Thoughtful Today: yeah, but you didn’t show your work, so who’s to say that you have the right answer….

  37. 37
    Thoughtful Today says:

    lol :)

    The math’s quite simple, not sure how simple it needs to be for a corporate insurance salesperson to understand … it’s almost like they’re paid to be confused.

  38. 38
    Thoughtful Today says:

    I’ve also done my research on what’s possible:

    President Clinton appointed managers to the Veteran’s Administration that had the VA producing superior results compared to any corporate insurance / private hospital system

    The Veteran’s Administration is as pure a socialist health care system as exists. The Government owns many of the hospitals and treats patients through Doctors hired directly through the Government.

    Poor management under Bush was deplorable, absolutely, Obama’s only marginally better.

    ! Nonetheless:

    Strong management with clear goals for the socialist health care provided through the US Government’s Veteran’s Administration produced better outcomes and higher satisfaction rates than any private insurance/hospital scheme.

    Bill Clinton proved socialist health care works.

  39. 39

    @Thoughtful Today:

    Right-wingers have been shoveling piles of money into private, for profit insurance companies and claiming that ‘fixed’ healthcare.

    Sadly, no, but I think we’ve all figured out at this point that you’re impervious to facts and reason.

  40. 40
    Richard mayhew says:

    @Thoughtful Today: did the VA turn around require any new legislation?

    Would Medicare E need a new law passed? Yes.

    Is that a significant feasibility difference that can not be overcome by Will and Purity of Intentions alone?


  41. 41

    @Thoughtful Today:

    The VA has a limited and (since Vietnam) self-selected population that is relatively easy to serve, as opposed to the mixed population of the US as a whole.

    You also seem to have missed pretty much the entire Bush administration and ignore the fact that most of the fixes to the VA were done under Obama, not Clinton.

    But, like I said, we’ve already figured out that you only listen to the voices inside your head and refuse to acknowledge any facts that don’t fit with your preconceived story.

  42. 42
    Thoughtful Today says:


    Troll Taxonomy needs to be updated to include the Bureaucratic Troll.

  43. 43
    Thoughtful Today says:

    The full, July 17, 2006, article used to be available at BusinessWeek:

    “The Best Medical Care in the Nation: How Veterans Affairs transformed itself — and what it means for the rest of us.”

    “… [during the 90s] the VA was reinvented in every way possible. In the mid-1990s, Dr. Kenneth W. Kizer, then the VA’s Health Under Secretary, installed the most extensive electronic medical-records system in the U.S. Kizer also decentralized decision-making, closed underused hospitals, reallocated resources, and most critically, instituted a culture of accountability and quality measurements. “Our whole motivation was to make the system work for the patient,” says Kizer, now director of the National Quality Forum, a nonprofit dedicated to improving health care. “We did a top-to-bottom makeover with that goal always in mind.”. . . .”

  44. 44
    Brachiator says:

    @Richard mayhew:

    did the VA turn around require any new legislation?

    Has the VA turned it around? What happened with the recent scandal that involved falsifying treatment and appointment records?

    I do not oppose the VA, Medicare or Obamacare. But I want realistic assessments of successes and failures.

  45. 45
    Thoughtful Today says:


    “Robert Bazell, Chief science and health correspondent, NBC News Updated: 6:33 p.m. MT March 15, 2006”

    “… In a study two years ago a group of researchers from the RAND Corporation and several medical Centers found that 67 percent of patients in the VA system received “appropriate care” as defined by expert panels on medical practice. Two thirds sounds short of the mark, but in the current issue of the New England Journal of Medicine the same researchers report on a survey of the country that finds only 55 percent of Americans in general are getting appropriate health care. And that number does not vary much with the patients’ level of education or income.”

  46. 46

    This thread is mighty sparse after blocking Lindholm and Thoughtful…

  47. 47
    Thoughtful Today says:


    Corporate interests paid an army of Bureaucratic Trolls to push their insurance schemes during 2009.

    I assume the current crop of Bureaucratic Trolls get excellent insurance for their paid advocacy.

  48. 48
    Richard mayhew says:

    Anyone want pie?

  49. 49
    Richard mayhew says:

    @Brachiator: it was excellent by the late 90s and then went down hill after the VA started to have to treat the veterans of Afghanistan and Iraq en masse

  50. 50
    Thoughtful Today says:

    No, Richard.

    The VA’s managerial problems were a result of neglect by President’s Bush and to a smaller degree Obama.

    It was also a funding problem as the Republican Party systematically gutted the VA where they could get away with it.

    Properly managed and properly funded, the VA is fantastic.

  51. 51
    Davis X. Machina says:

    @Thoughtful Today:

    Properly managed and properly funded, the VA is fantastic.

    Assume a can opener…

  52. 52
    Thoughtful Today says:


  53. 53
    GHayduke (formerly lojasmo) says:

    @Thoughtful Today:

    Don’t know how much you’ve dealt with the VA, but they will happily tell a vet to shove himself up his own ass sideways.

  54. 54
    Duane says:

    @Mnemosyne (iPhone):

    Running on the ACA is a proven winner.

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