August 25, 2017


Obamacare Is Officially Not Collapsing (Eric Levitz, 8/25/17, nEW yORK)

The source of Obamacare's resilience appears to be twofold:

(1) Even in red America, state-level officials did not want to see their health-care markets fail, and they worked to convince insurers to cover less desirable areas.

(2) Being the only insurer in a county's Obamacare marketplace is a sweet deal.

This last point was likely the most significant. As Vox's Dylan Scott explains:

[Obamacare] provides financial assistance for people making 100 percent of the federal poverty level (about $12,000 for an individual) up to 400 percent (about $48,000). It caps the premiums that people have to pay at a certain percentage of their income; the less money you make, the lower the premium you have to pay.

So in an empty county, where an insurer doesn't have to worry about a competitor undercutting them, companies can set premiums to cover their costs without worrying that they'll price their coverage too high for many of their customers. It's going to be the federal government, not a person with a subsidy, picking up much of the extra cost.
Anytime one insurer decides to leave a county fully abandoned, another will see an opportunity to establish a federally subsidized monopoly in its place. This is, of course, a less-than-ideal way to prop up an insurance market. While Uncle Sam ensures that low-income people can afford insurance in single-provider counties no matter the price, those right above the cutoff for subsidies ($55,000 for an individual) aren't so lucky. And enabling insurers to operate free from competition doesn't exactly help slow the growth of health-care costs (or that of the national debt).

But these defects are of little political use to Republicans, who boast no viable remedy for any of them. The GOP's best argument for replacing the ACA with Trumpcare was that the former was on the verge of death and had to be replaced with something. Trump tried to make this true. Nevertheless, the ACA persisted.

...the GOP was only going to make Obamacare more expensive, nor repeal it. Now it's time to offer genuine universality in exchange for mandatory HSAs/catastrophic and get something worthwhile for what we're spending.

Posted by at August 25, 2017 8:15 AM