July 18, 2019


How Obamacare brought health coverage to the people, in four amazing charts (MICHAEL HILTZIK, JULY 18, 2019, LA Times)

There are many elements to the conservative mantra that the Affordable Care Act is a "disaster" -- it's too expensive, it doesn't cover all that many people, it's driven up costs for everyone, etc., etc. None of this is news to anyone who follows healthcare affairs. Nor is the fact that these criticisms all are either false or misleading.

A new study from the Society of Actuaries graphically shows how false and misleading. It documents the sharp rise in coverage and medical utilization in the individual health insurance market starting in 2014, when the ACA's insurance exchanges began operating. The actuaries also document that costs and utilization trends in the large- and small-group market -- health insurance provided by employers -- remained stable, fell, or continued trends that already existed before the advent of the exchanges.

The report, a collaboration with the Health Care Cost Institute (hat tip to David Anderson of Duke), is crystal clear about the reasons for the jumps in coverage and utilization. Chiefly, the launch of the individual exchanges resulted in a "surge of pent-up demand in both previously uninsured populations and previously uncovered services."

Simply put, many of the new entrants into the health coverage market had been uninsured "due to preexisting conditions," which had resulted in their being refused coverage or offered insurance at inordinately high premium rates. The ACA, moreover, mandated coverage of conditions that previously had been routinely excluded from individual health plans, notably maternity services.

Before the ACA, insurers in the individual market charged women of childbearing age sky-high premiums for policies including maternity coverage, on the perfectly fair assumption that they would probably use it. That discouraged the entry of those women into the insurance market. "Similarly, male members or other members not likely to give birth would select individual coverages that excluded maternity so as to pay a lower premium," the actuaries observe.

Under the ACA, the cost of maternity care is spread among the entire insurance pool. That gives younger women more financial incentive to buy coverage. In effect, non-pregnant buyers subsidize pregnancy. Despite the idiotic posturing of conservatives (including President Trump's own Medicare and Medicaid director, Seema Verma) that maternity coverage should be optional, this is plainly the proper policy, as the cost of propagating the species shouldn't be imposed exclusively on women aged 18-45.

Posted by at July 18, 2019 5:28 PM