Monday, January 13, 2014

An Expert’s Opinion on ObamaCare’s Fundamental Problem

The common problem, yours, mine,  everybody’s
Is – not to fancy what was fair in life
Provided it could be – but, finding first
What may be, then finding  out how to make it fair
Up to our means.

Robert Browning (1812-1889), Bishop Bloughgram’s Apology

Believe one who  has proved it.  Believe an expert,

Virgil (70 to 119 BC), Aeneid

What is ObamaCare’s fundamental problem? Why is it not fair? Why do Americans oppose it? 

When you don’t know the answers to such questions, ask an expert.   That’s what Ezra Klein, a Washington Post columnist and ObamaCare aficionado , set out to do when he interviewed Robert Laszewski, president of Health Policy and Strategic Associates,  a health policy expert with a deep knowledge of health plans.

Here, in summary form,  is the essence of what Laszewski had to say.

The front-end of is in pretty good shape. The back-end is problematic and still has a 5% error rate.  The insurance industry is struggling to correct these errors and must do the corrections manually by contacting error-afflicted patients.  This is a huge problem when one considers the time required and shifting deadlines imposed by last minute ObamaCare tweaks.

Another big problem is low total enrollment figures.  Only 10% of the total pool of possible candidates have enrolled.  ObamaCare needs to sign up 70% to make a go of the health law to ward off unaffordable costs and a death spiral due to adverse selection.

The number of total enrollees needs to be 20 million paid in the first 3 years.  Yet only 2 million of those so far enrolled have paid.  The projected target of 7 million by the end of March won’t cut it.

Word is out that the government can’t collect the light penalties imposed by the individual mandate. It’s a big reason people aren’t enrolling.  When the penalties climb in future years,  people will want to get rid of the individual mandate with its heavier penalties. They will hate the mandate. The future of ObamaCare depends on what the American people think of the law.  If they still dislike it, they will bring pressure to bear to dispose of the mandate.

As of now, the uninsured and the healthy insured don’t like what they see in ObamaCare.  They think it’s a bad deal. ObamaCare’s mandated benefits have driven up costs so high and narrowed networks so much that people are turned off, even with subsidies.

Middle class customers do not consider health exchange plans to be desirable. They are not going to pay 10% of their incomes for health plans with $5000 deductibles and a narrow network that may not include their doctor. Who would pay $5000 for that?  Health exchange plans are product-driven not market-driven.  
 The designers of ObamaCare plans simply did not ask consumers what they would wanted.  That’s the fundamental problem with ObamaCare.   “It meets the needs of very poor people because you’re getting the health insurance for free. But it does not meet the needs of healthy and middle class people.”

Tweet:  The fundamental problem with ObamaCare, says an expert, is that it does not the meet the needs of the healthy middle class, the people who decide elections.

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