People Still Seem Confused About What Affordable Means

I’ve discussed many times how the term affordable is misused when describing Obamacare–there is a difference between a good healthcare system and one that is simply better than. Unfortunately, there seem to be quite a few moderate Democratic pundits who insist on denying some people’s experience with Obamacare, which has made them worse off than before. Consider this (boldface mine):

Take the Obamacare truthers, those who refuse to believe that the law is working or argue that costs are out of control. As my colleague Jonathan Chait has pointed out, that’s just not the case looking at the data. The Affordable Care Act is working remarkably well. The rate of Americans without insurance has fallen 30 percent. And cost growth declined to its lowest recorded level in 2013. Granted, that rate should rise in 2014 as the law’s coverage provisions kick in. But even so, the Centers for Medicare and Medicaid Services currently estimate that cost growth will hit just 5.6 percent this year, well below the average annual rate of increase between 1990 and 2008 of 7.2 percent. Moreover, premiums are not out of control. For those on employer-sponsored plans, they’re increasing about 3 percent a year.

But there’s a reason that Americans don’t really trust the insurance expansion, and a reason that they think that medical spending is rising. That is because their deductibles and co-pays have risen sharply, meaning that their out-of-pocket medical spending is growing at a fast clip. According to the Kaiser Family Foundation, the proportion of people with employer-sponsored health insurance that pay a deductible has risen to 80 percent today from 55 percent in 2006. The average deductible has more than doubled to $1,200. That has left many individuals deferring or declining care to avoid spending money they do not have on tests, prescriptions, or doctor’s visits. Even if they have insurance, they cannot afford to use it.

The people who are least capable of paying high deductibles for new insurance policies via the federal exchanges — meaning lower-income families — are often precisely the ones who elect to join plans with high deductibles and thus might feel like they are drowning in medical bills. The average deductible for a super-high-cost platinum plan is just $347. The average deductible for a cheap bronze plan is more than $5,000.

The great irony is that the trend convincing families that health spending is out of control is the same trend that is holding health spending down. Co-pays and deductibles hit families hard by forcing them to spend out of pocket. But by hitting them hard, they help to reduce hospital and doctor’s visits and pull the headline health-spending number lower.

(If you’re a glutton for punishment, the New York Times details how things have become worse).

While the author makes it sound like people who choose high-deductible plans are being foolish (those stupid poors!), they often don’t have a choice. As I noted years ago, they can’t afford the low deductible plans. Essentially, they’re trying to skate by on the plan with the cheapest monthly payment because they can barely afford that, while hoping they don’t get sick (or possibly get a better job). If they do get sick, instead of going into ten of thousands of dollars of debt, they will ‘only’ go into thousands of dollars of debt. If you don’t believe me, the Boston Federal Reserve has made the same point.

That the reporter for New York does not understand this–and is willing to blame lower-income people–is why the transformation of journalism into a nearly exclusive upper-middle class domain is so harmful (and is a perfect example of what some would call class privilege).

We need to stop telling people not to believe their lying eyes. It’s not helping. Instead, we need to discuss how to fix these particular problems. Or maybe just move to single-payer. A boy can dream, can’t he?

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3 Responses to People Still Seem Confused About What Affordable Means

  1. David J. Littleboy says:

    ” It’s not helping. Instead, we need to discuss how to fix these particular problems. Or maybe just move to single-payer. A boy can dream, can’t he?”

    Well, no. It is helping. And no, you can’t dream unless we elect a progressive-controlled House and Senate, and that’s not happening for another generation or so, it seems. So explaining to people that things have gotten worlds better is important.

    Pre-ACA private insurance in the US was a horrific disaster, but almost no one understands that. So that needs to be said, over and over, loud and clear. Post ACA, we’ve still got problems, but it’s at least in the ballpark of what other countries are doing. As a freelance translator working in Japan*, I’d have been insane to return to the US before the ACA. Now going home is at least an option. This really is, as Joe Biden said, “A big effing deal”.

    Prior to ACA, there weren’t any subsidies, so the choice for most people without employer provided insurance was no insurance, no insurance, or no insurance. For a smattering of well-off folks, the choice was expensive insurance until you got sick, then no insurance at renewal (“Sorry, we’re not offering this product anymore, you’ll have to reapply”). Chemotherapy until you hit your “lifetime limit” and then no chemotherapy, if you were lucky. This insanity was unknown anywhere else in the industrialized world. Pre-ACA, insurance companies profited by denying claims; now they have to sell more policies to increase profits. (The requirement that insurance companies spend 80% of premiums on health care changes the game completely: the insurance industry no longer profits by screw the patient.)

    Sure, single-payer, Medicare for all, would be better. But that’s not an option, and won’t be for a long long time. Political reality in the US.

    Overall, though, the only way to get costs down* is to do what Japan does: draconianly limit payments for services for all providers; make going “out of network” an option only a very few can take. (But that is something doctors aren’t going to like.) To get to affordable, single payer, you need everyone on board understanding that insurance companies and doctors can’t have what they want.

    Sorry about the rant here, but not getting how amazing ACA is compared to the disaster that private insurance was before ACA pisses me off.

    *: Five days in the hospital for a detached retina set me back US$2000 or so, but they refunded half of that as exceeding the maximum monthly out of pocket. A root canal plus crown on a wisdom tooth (six visits to the dentist) set me back less than US$100. Japan is seriously amazing. The care is really good, too, although apparently there’s about the same rate of preventable medical mistakes in Japan as the US.

  2. edivimo says:

    And here, in Costa Rica, a middle income country, I can’t understand how you can allow that.
    I read a paper on health care reform here the main sugestionof the World Bank and the Chilean advisors was privatization of the government controlled healthcare system. And the government in that time, from a center-right party, told them diplomatically: go fuck yourselves.
    One of the main differences here is that the public healthcare’s unions are the most powerful in this country and they go to strike for any mention of privatization of the healthcare sector, even that is illegal for them to strike… Most Costa Rican’s think the unions are abusive, but they’re the fiercest defenders of the healthcare system.

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