Obamacare

How the Affordable Care Act Continues to Fall Short

The government always fails to deliver on its promises.

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Doctor
Dreamstime

Of the seven main candidates running for president, only one wants to keep the Affordable Care Act in place: the Democratic kind-of-front-runner Hillary Clinton. Everyone else wants to get rid of it. 

Most Republicans would replace it by returning health insurance regulation to the states, although they would also lock in much of the ACA's new spending. Self-proclaimed socialist Bernie Sanders would replace it with a single-payer system—Medicare for all. It's a terribly inefficient and costly idea, as many pundits have explained. 

But it's worth noting that Sanders' main beef with the ACA is that it doesn't offer universal coverage. Basically, not everyone is insured under the law. While I think he and the other candidates are wrong to see the provision of health insurance cards to all or most Americans as the be-all and end-all of health care policy (health care coverage, put simply, is different from health care), Sanders is right. 

One understands his disappointment since covering most of the uninsured by making insurance affordable was a main policy goal of the health care overhaul. That's what the employer and the individual mandates—the requirement for every American to buy health insurance—were for. Those who didn't buy insurance would be required to pay a fine to cut down on the would-be free riders—who wouldn't buy insurance and then, when they got emergency room treatment, would stick taxpayers with the tab. 

Yet, the mandates aren't working as planned. My colleague Brian Blase recently summed up the difference between the projected numbers of people who were expected to enroll in the ACA during this third open enrollment and the people who actually did. He notes a high estimate of 12.7 million people signing up for an exchange plan. But Blase actually thinks there will only be an average of 11 million enrollees this year. That's 16 million fewer than the Rand Corporation predicted, 11.8 million fewer than the Centers for Medicare and Medicaid Services predicted, 12.1 million fewer than the Urban Institute predicted and 10 million fewer than the Congressional Budget Office projected. 

In my opinion, this gap is another example of how the government always fails to deliver on its promises (whether you like the promise or not). On one hand you have the theory: The ACA will finally address the problem of the uninsured in America. On the other hand, you have a reality produced by politics and unintended consequences. 

The politics here is that the administration didn't resist pressure from interest groups, and it extended so many exemptions to the payment of the fines that 70 percent of uninsured Americans won't be forced to pay a fine in 2016, according to data from the tax-filing software Turbo Tax. The 14 exemptions include things like economic hardship or cancelled insurance, which addresses the failed "if you like your plan you can keep it" promise. These are on top of exemptions written in the law for illegal immigrants, religious groups and Native Americans. 

Now, some may think that it's good to exempt these groups. (I actually wish everyone were exempt.) However, right from the get-go it jeopardized one of the main objectives of the law. It has unintended consequences, too. Without as many young and healthy customers as planned—the ones who would be charged higher premiums to cross-subsidize others—insurance companies are finding the cost of the law hard to stomach. Some are threatening to leave the exchange while taxpayers foot a larger bill than originally planned as a result of having to bailout insurers. 

Another unintended consequence of lower exchange enrollment is lower spending relative to what was expected, leading to more taxpayers footing a larger bill per enrollee since most enrollees are around the poverty line and thus receive large subsidies. 

There are many other problems with ACA enrollment numbers. As Blase notes, "young and healthy people in the middle class are shunning exchange plans." All these failures make a catastrophic collapse of the exchanges more likely. Let's hope it doesn't open the door to the ultimate Democratic dream of turning America into France by adopting a single-payer system. 

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  1. The ACA is not affordable, it drains my bank account, eats up my entire tax return, raises my premiums, and raises the deductible for people who already can afford Health insurance.

    Fuck this shit.

    /Drops mic

    1. Have you heard? Dear Leader may grant you an exemption if you can’t afford the affordable care act.

      1. Dear Leader’s definition of “can’t afford” is probably a lot different than yours or mine. If you have any money left after paying your premiums and/ or your taxes, then I’m pretty sure Dear Leader will say you can afford the ACA. Unless you’re one of his cronies, of course.

      2. If it’s 8.5% of your income for the lowest level insurance plan…. I lost my Health Insurance for the last quarter of the year and have to pay $200 on top of the taxes I owe. My Health Insurance, admittedly not the lowest level, was 8.4% of our income…

        Taxes are hell when you have two working adults who work multiple jobs each, plus extra contract work.

  2. No! I just read an opinion piece in NEJM about how the uninsured are at a super super low and that improved medical outcomes are sure to follow!

    Ah, the wonderful state of medical literature.

    1. It’s dropped several percentage points, and last I looked wasn’t even below historical lows. That’s what the entire Obamacare fight was over.

      1. His site where he is Editor Publish be damned.

  3. My friend’s sister in-law makes $55 /hour on the computer . gr She has been out of a job for nine months but last month her income was $13390 just working on the computer for a few hours.visit that site….

    ——— http://www.alpha-careers.com

    1. Seen it.

      1. Me too. His friend’s sister-in-law makes some really great videos! Some freaky stuff too!

  4. Have you heard?

    Dear Leader says if you can’t afford the Affordable Care Act, He may grant you an exemption!

    1. He is as merciful as he is strong!

  5. only one wants to keep the Affordable Care Act in place: the Democratic kind-of-front-runner Hillary Clinton.

    Well, to be fair, she wants to “build on it”, whatever that means. Maybe she’ll raze it and use the foundation.

    1. Those of us who recall the early Clinton years remember that Hillary Care promised just as byzantine a system as what Obama gave us, I suspect her “Building on it” means more layers of bureaucratic patronage jobs and even less efficiency.
      I seem to recall saying that government provided healthcare would have the efficiency of the DMV and the kindness of the IRS. We gave it too much credit,

      1. I suspect her “Building on it” means more layers of bureaucratic patronage jobs and even less efficiency.

        Oh, no doubt about it. A *6000*-page “law”.

  6. One little note: the native American exemption makes sense because registered tribal members can get care from the feds already, so they are basically on a Medicaid like system to begin with. Or, at least, they have access to care, although those who can afford private coverage generally do so, because, well…..the Indian Medical System is like Medicaid.
    Oh, and it’s still far cheaper to pay the penalty than buy the insurance through the exchanges. Not to mention the incredible headaches that the post office level incompetence of most people working in the exchanges causes for many, if not most, of the people who try to use them. I have seen numerous 1095 A’s showing only a couple of month’s coverage for people who had coverage all year. Not surprising, since the system was put in “service” without first developing the infrastructure, so massive screw ups are the rule, not the exception.

    1. So supposedly independent nations get government health care paid for by tax payers? That makes sense!

      1. But a long time ago, some white people were mean to them, and the color of your skin is white, therefore you must be made to pay!

        If you disagree, you’re a greedy racist who wants to profit from the continued genocide of Native Americans.

  7. My two sentence healthcare plan that gets roughly as much done as ACA at a fraction of the cost:

    Refundable tax credit for 100% of out-of-pocket insurance costs, maximum of [insert national average premium per person], valid only for households under 40k in income.

    Households over 40k: be an adult and get insurance, or don’t; the government isn’t your damn mother.

    Not fully libertarian obviously, and still an expensive welfare credit, but aren’t those two lines better than the current thousands of pages of regulations?

    1. Without the thousands of pages, how could they reward cronies and social engineer?

    2. I made this proposal several on this site several years before Obama got elected and was shouted down by Joe. But yeah, why can’t we end the tax deductibility of business provided health insurance, thus ending the link of employment and health coverage, thus enabling the consumers of health insurance coverage buy directly for sellers of health insurance coverage, thereby bringing a modicum of market forces to bear upon the cost of medical care?

  8. Does the church of the flying spaghetti monster grant me exceptions from these onerous government regulations? I have been touched by His Noodly Appendage.

    1. Show us on the doll where he touched you…

  9. As someone who deals with ACA pretty much every day [I work in health care] there are basically three ways it manifests itself:

    1. Strait up market plan ACA: it costs too much for too little; you hardly ever see this being used in my world.

    2. It is highly subsidized: I more often see patients who pay $60-$80 a month for ACA because they financially qualify for government subsidy; it is still pretty lousy insurance due to high deductibles and co pays, and limited providers that accept it.

    3. Expanded Medicaid [which depends on State you live in]; this encompasses the vast majority of those who benefit from “Obamacare” and is totally tax funded; it is also very comprehensive coverage and RXs cost around $2-$6.

    While this does indeed cover more people, the theory on which it was premised, that younger, healthier subscribers who would pay full price to offset everyone else is not happening. As the penalties increase to the point that is does indeed cost as much or more to not buy the plan, this will likely change but only because uninsured individuals and families are forced to get it. Which of course is the main reason libertarians do not like it in the first place.

    Progressivism in action.

    1. Exactly. Yes, more people are covered, but it’s shit coverage, and various ACA provisions raised the premiums on existing plans while limiting coverage. And, yes, the death spiral is going to take it down within a decade. Which, of course, was the idea all along; a single-payer system like you see in the UK, with private boutique insurance for those who can afford it.

  10. On the other hand, you have a reality produced by politics and unintended consequences.

    Without as many young and healthy customers as planned?the ones who would be charged higher premiums to cross-subsidize others?insurance companies are finding the cost of the law hard to stomach

    Another unintended consequence of lower exchange enrollment is lower spending relative to what was expected, leading to more taxpayers footing a larger bill per enrollee since most enrollees are around the poverty line and thus receive large subsidies.

    Both of these unintended consequences were foreseen by the law’s critics before it was even passed. What’s that saying? “Easily foreseen consequences are not unintended?” Seems like that should be an Iron Law or something.

  11. Also, you use a stock photo of an Asian doctor, reason? LACISTS!11!11!!!!!

  12. hai

  13. ….$….Just before I looked at the paycheck that said $6914 , I didnt believe that my mom in-law really bringing in money in their spare time from their computer. . there neighbour had bean doing this for only six months and resently paid for the mortgage on there place and bourt a top of the range Saab 99 Turbo . look at this site….

    Clik this link in Your Browser..

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    1. Your mommy in law is banging Johns who have a fetish of old ladies, and your wife is bringing up the rear.

  14. Inescapable Consequences

    “The trouble with socialism is that eventually you run out of other people’s money?” -Margaret Thatcher (1925-2013)

    It all began in 1965 with the passage of Medicare. That law set the stage for so-called Managed Care, better called “Managed Cost” and the rest of the current ills in the American system of medical delivery ? notice avoidance of the governmental euphemism “healthcare” ? including ObamaCare. Medicare alone is bankrupting these United States of America.

    It’s been known for years that, during the last year of life, Medicare recipients spend 30 cents of every dollar that they’ll have spent on medical care during their entire lifetime.(1) Of those 1% with the highest costs in any given year, approximately 50% die. Of those 5% with the highest costs, approximately 40% die. Of those who survive, 50% are demented by the age of 85.

    The American System of medical delivery isn’t making more patients well. It’s making the nation sick.

    See “A Paradox?” under …
    http://nationonfire.com/catego…..re-reform/ .

    Gene Richard Moss, M.D.
    Author of Healthcare Reform D.O.A. (out if print), nominated for two national awards by the American Risk & Insurance Association

    Reference
    1. See, for example, Lubitz, JD and Riley, GF: “Trends in Medicare Payments in the Last Year of Life”. New England Journal of Medicine 328:1092-1096 (1993).

  15. I bet Donald Trump keeps the ACA.

  16. Fuck the ACA… that’s all…

  17. ….$….Just before I looked at the paycheck that said $6914 , I didnt believe that my mom in-law really bringing in money in their spare time from their computer. . there neighbour had bean doing this for only six months and resently paid for the mortgage on there place and bourt a top of the range Saab 99 Turbo . look at this site….

    Clik this link in Your Browser..

    ???????? http://www.Wage90.com

  18. This bill never would have passed if Obama had given the following speech in 2009:

    Now let me be clear, for most of you out there, your health insurance premiums will continue to climb at double digit rates, and you can expect those deductibles and copays to go up as well. For some of you, you will have to find a new doctor and you will lose your current insurance, and you will be forced onto a government plan with higher premiums that includes services you neither want nor need. But let me tell you this, my fellow Americans, when you see that we will have provided insurance to about 1/4 of the uninsured, you will say your sacrifice is worth it.

  19. thousands and thousands of pages of unread socialized medicine never read by the politicians
    is Treason against the people!!

    I read that there are 20,000 pages now and you can bet it is still be written..

    The people have really been enslaved by this treasonous act!!

  20. Repealing prescription laws would have done more good since it would destroy the government enforced monopoly that doctors currently enjoy over access to medical drugs. Note that prescription laws were passed during the FDR administration when the liberal wing of the Democratic Party was in control of things.

    Without prescription laws many people (especially today with so much information available on Internet sites such as “WebMD”, which not only covers the more common medical drugs, but also their side effects and “user reviews”). I’ve also found out that incredible as it may seem, I can do a better job of taking care of my health than my doctors can! No doubt they could do a “better job”, but that would require that they take the time to actually study things, and today no doctor can afford the time to do so… For example many “tests” are effected by what you’ve done previously before the tests. If you are dehydrated your kidney test will be inaccurate. Certain medications will effect your red cell count. And they appear to be more concerned over “life span” than patient comfort. Whereas I’d much prefer that they do the opposite as I have no desire to end my life in a nursing home!

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