ObamaCare Grapples With Tough Dilemmas That the Market Solved Long Ago

An advisory panel of experts set up by the Obama administration gave this expert advise yesterday, according to the Washington Post: The administration ought to emphasize affordability over breadth of coverage, when implementing the law.

 Explains WaPo:

 [The Affordable Care Act aka ObamaCare] sets out 10 general categories — ranging from hospitalization to prescription drugs — that all new insurance plans for individuals and small businesses must offer starting in 2014. It also states that the scope of the essential benefits package should be equal to that of a "typical employer plan."

But Congress did not specify whether this referred to the more generous plans sponsored by large employers or the more minimalist versions bought by many small businesses. And it gave Secretary of Health and Human Services Kathleen Sebelius ultimate authority to decide both how much more detailed to make the package and what to include in it.

If she adds little to the legal requirement, the market could end up split between cheap, bare-bones plans of use only to the healthy, and exorbitantly priced full coverage plans financially out of reach of many sick people who need them most.

If she adds too many requirements, premiums for all plans could soar — with consequences for not just individuals but the success of the law as a whole. That's because many healthy people could decide to pay a penalty instead of buying pricey insurance, skewing the risk pool toward the sick and causing premiums to spiral higher.

That would also cause a spike in the subsidies for health insurance premiums, which the law requires the federal government to offer low-income people, hammering the national budget.

The committee proposed that the law be interpreted to require that the scope of benefits be equivalent to a typical small-employer plan.

In other words, Sebelius' dilemma is whether or not to take away a perfectly good option—catastrophic coverage—that the market currently offers patients. And the expert advice is that she should not. I'm not sure whether to applaud this dawn of wisdom or weep that the Obama administration needed a panel to tell it the obvious.

What's next? An expert panel advising the administration that GM should, after all, keep its wheels round? 

Comments

[Old Mexican]

I'm not sure whether to applaud this dawn of wisdom or weep that the Obama administration needed a panel to tell it the obvious.

I weep at the fact that the Obama administration cannot see other just as obvious things, like the fact that throwing good money after bad does not yield anything except an empty wallet.

[Bean Counter]

But, square wheels are so much easier to store and handle. Those damn round wheels are always running away from us.

[Mainer]

Wasnt' there a thread just yesterday on the problems created by smart people who aren't as smart as they think they are ?

[Federal Dog]

Why do you think they are "smart?"

[Res Publica Americana]

It's kind of like 1960s-era Soviet-made copies of 1930s-era western cameras being lauded as exceptional advances in photography by the Soviet government. It's just fucking sad, pathetic, worthless, and sad. Twice sad.

[robc]

The really sad part isnt that it took a panel to figure out the obvious, but if that there is some change in the future the makes the obvious something different, they wont change it.

[Number 2]

The really sad part is that there is as much of a chance of Obama listening to these experts as there was of him listening to the experts he hired to advise him on balancing the budget. Remember them?

[Live Free or Diet]

The ones who failed to advise federal spending be cut 10% per year for ten years?

I know it looks like the 2022 budget would be $0.00, but the 2012 budget of $3.7 trillion x 0.90 x 0.90 x 0.90 x 0.90 x 0.90 x 0.90 x 0.90 x 0.90 x 0.90 x 0.90 = $1.3 trillion for the 2022 budget.

[Jordan]

And that's why health insurance is so expensive. Insurance is catastrophic coverage. But now it's synonymous with third party payment to your average shlub.

[Invisible Finger]

And Insurance is NOT routine care.

Let's admit these people are the exact opposite of "smart'.

[rather]

"In other words, Sebelius' dilemma is whether or not to take away a perfectly good option?catastrophic coverage?that the market currently offers patients"

Where Shikha Dalmia ?

[Forbes]

Yeah, it's impossible to buy catastrophic insurance in New York, as the state mandates 52 coverages. You don't pay for insurance, it's pre-paid healthcare for the masses, as dictated by the smart set in Albany--and soon, Washington. A travesty. Obamacare is a full employment act for healthcare workers unions.

[rather]

Our expertologist doesn't get that ' catastrophic insurance' is as real as the The Libertarian Charity Fairy Solution? ? ?

[sevo]

You truly are an ignoramus.

[Whappan?]

Of course, the only reason it's not "real" is that it's outlawed.

[rather]

outlawed...keep going
because of

[Federal Dog]

"ObamaCare Grapples With Tough Dilemmas That the Market Solved Long Ago"

It does not "grapple with" anything: It merely creates those dilemmas.

Again.

[David Thomas]

"gave this expert advise" Should be advice.

[Invisible Finger]

"Affordable Care" sounds an awful lot like "affordable housing". We already know how that turned out.

[J Nail]

This post is disingenuous at best and misleading at the minimum.

There is no "market" but over 50 in the US at the state level with each mandating all sorts of things and nearly all unregulated in terms of annual premium increases.

IOM recommended that the essential benefits plan be that of "a typical small employer" which means it is not real exotic. A basic PPO plan with appropriate deductibles and copays and maybe an HSA or HRA option.

Clearly you do not understand that today the state mandate all sorts of things, in fact 2282 things averaging 42 per state, many are useless.

The ACA essential benefits do not have to include all these items which will help many folks overall and simplify the sheer volume if things insurers need to track nationally.

Insurers will stay offer plans in the traditional markets AND in the new private exchanges that Wellpoint and other insurers are rolling out in all 5O states to compete with the state exchanges offering real competition and defined contribution benefit plans for employers across multiple insurers.

With 3 markets operating in the states and new carriers participating the employers and consumers will be big winners with more options and lower costs.

Think it is crazy? With the private Medicare Advantage plans for seniors they have dozens of options and that has created a market where for 2012 their rate will GO DOWN 4% for better coverage, even after ACA removed $500B in subsidies to insurers over the next decade.