Friday, November 22, 2013

Five things ACA supporters are just learning (Part III of III)

… that ACA opponents knew from the beginning.  That’s why we were ACA opponents in the first place (duh).

See the full article here

Continued from Part II –

“4. Obamacare is immensely complicated.”

Tell me, what part of “2,000-page bill that no one has read” said to you, “The ACA is simple, intuitive, and straightforward”?  Here’s a clue: the correct answer is “Nothing.”

“5. The exchanges offer limited choice of doctors.”

Not just the big, bad insurance companies here.  Doctors themselves are opting out.  Yes, those paragons of selfishness, who racked up hundreds of thousands of dollars in debt, actually want to make enough money to pay off their debt, provide for their families, AND live the decent lifestyle that they have worked for years to achieve.  The horror!

In all seriousness, this is one of the biggest ways that companies cut costs – by limiting the range of benefits and in-network providers.  That’s how HMO’s work.  They are crazy effective at cutting costs, but the price of cutting costs is limited choice.  The ACA’s effect on insurance policies is no different – if you mandate lower costs, the first thing to go is a range of choices.

My designer insurance reform:

1) Get rid of state-specific insurance plans.  Let coverage be nation-wide.  This would increase competition (lower premiums), give each company a wider policyholder base (lower premiums), reduce state-specific administrative difficulties (lower premiums), but would also mean more claims payouts (higher premiums).  On balance, I think this will result in lower premiums.

2) Ditch the insurance-through-employer model (See part II).  This will hopefully eliminate the moral hazard problem as people pay for exactly the coverage that it’s worth it to them to pay for.  I think this will result in lower premiums.

3) Subsidized risk pools (See part I).  This will result in higher premiums, but I think all three points together will result in lower premiums and more satisfaction with coverage, on balance.

If you have any other ideas, or if I am wrong about anything, or I forgot to address something really important, please let me know.  I am genuinely interested in how to help fix our healthcare system without the train wreck of the ACA.

1 comment:

  1. I am on the employer side of the equation and I want to be able to a couple thousand a year in an account for each employee that carries what they don't spend on out of pocket expenses into the future. As the accounts add up in value I can buy real major medical"insurance". (as opposed to prepaid care) I look at the rules for Hsa s every year and they just don't make sense to me. I also concur with your idea insurance should travel with the individual not the group.
    Kale is gross.