Thursday, October 31, 2013

On the policy-cancellation issue

Jared Bernstein gives us a reality-check on the hoopla over insurance companies changing insurance policies supposedly in contrast to what President Obama had previously promised (More on Health Insurance Cancellations Huffington Post 10/30/2013):

The accurate statement should have been: "If you're one of the 95 percent of insured Americans with health coverage through your job or the government, then your plan won't change. If you're purchasing a plan in the individual market, and that plan remains unchanged, you'll also be able to keep it. But if you're non-group plan changes for the worse, it won't be offered once the new law kicks in."

It's awfully hard to separate substance from politics right now, but this is just a simple adverse selection problem. You can't have a sustainable national health care system wherein people are allowed to impose their health costs on others, just like you can't have an auto insurance system with uninsured drivers. The key to understanding this part of the law -- and again, we're abstracting from the politics for a moment -- is that the word "insurance" implies a standard level of coverage that avoids the type of cost shifting that occurs when an un- or under-insured person gets sick.
As he explains, policies that are based on that approach "are inconsistent with the ACA. So they can't be offered under it."

Garance Franke-Ruta in Obama to People With Canceled Plans: 'Just Shop Around in the New Marketplace' The Atlantic 10/30/2013 thinks Obama managed to step up the quality of his response to these attacks this week:

"If you're getting one of these letters [canceling a plan], just shop around in the new marketplace. That's what it's for," Obama said. Of course, getting new plans through the exchanges so far has been easier said than done: As Obama spoke, the site was not usable due to a Verizon data hosting problem.

The remarks were Obama's first public response to the furor over his many statements telling insured Americans if they liked their health insurance, they could keep it even after the Affordable Care Act too effect. His assurance has turned out to come with some pretty big caveats—more like if you like your insurance and your insurer chooses to keep offering it and doesn't make any significant changes to the plan that would trigger HHS rules requiring further changes, then you can keep it.

But the affable Obama on display in Boston was a far cry from the more miffed chief executive who a few weeks ago stood in the Rose Garden and described the rollout of as frustratingly unacceptable. He wasn't backing down or apologizing this time.
Obama should have talked Bill Clinton into heading up some special rollout push starting in October and running through December. The Big Dog would have been a great salesman for this.


No comments: