Maine Health Professionals Working to Provide Affordable Insurance

[Locrian]

To clarify (not all will need this clarification),

The ACA has, unfortunately, made the word “premium” very confusing. The person mentioned earlier in the thread does not have a $26/month premium (and I don't think Turbo called it that) – it is probably more like $400-$500. However the insurance company is getting two payments – one from the member, and the rest from the government. Or, at least they are supposed to, if the system were working properly.

This portion coming from the government will be coming from taxpayers. There are taxes in the ACA (lots of them) that were meant to partially offset this, but they are small in the scheme of things.

So for me, the word premium means "the amount the insurance company is getting" (because I've helped set rates in the past). For the rest of the US, the word premium means "amount the person is paying". In the media it isn't always clear which is being used.

 

[Locrian]

Finally,

You’re going to hear a lot about the narrow networks in ACA plans. Keep in mind that narrow, but sufficient, networks are a highly efficient way to cut costs, and they do so in a market-oriented manner. They cut costs first because limiting the network increases the insurance company’s negotiating leverage substantially. Networks that include every provider often have little real leverage, since they absolutely have to bring every provider onboard.

More importantly, not all providers are equal. There are, in any major market, a few outrageously expensive systems. These often can’t be shown to be measurably higher quality than any other. You can save a bundle just by cutting them out. This is a reasonable way to encourage healthcare efficiency in the market.

This doesn’t mean narrow networks are best (maybe you value much higher premiums for slightly or immesurably health insurance), or that they didn’t overshoot the mark (there’s a range between wide and narrow). There are some very narrow networks being offered in the ACA, and I expect some consumer pushback. However in most markets there are actually both narrow and wide networks being offered, so people still have the choice if they take the time to do their research (it appears they aren't, for the most part).

So they may not be best, but the way the ACA is being blamed in the media isn’t appropriate. They are really part of a larger trend towards healthcare efficiency that has been going on (well, off and on) for some time. HMO’s, after all, are essentially a very narrow network with a gatekeeper.

 

[Czcibor]

Yes, but that's the way *all* insurance works. The risk is shared among a large group of subscribers, and the larger the group, the lower each participant's cost. So having a cheap "opt out" door deflates the whole intention of this program.

Be aware, if you chose to pay the penalty rather than buy insurance: just because you pay the (very small) penalty doesn't mean you are off the hook for any medical bills you acquire. You still have to pay those, too.

I think that Mheslep is trying to explain that you mix up normal insurance with redistribution schemes. With correctly priced insurance your premium is based on your risks. Under normal conditions you can't seriously game the system. If you are low risk, you receive low premium, high risk - high premium. If the margins (and transaction costs) are low its rational with even mildly risk adverse individual to enrol, regardless whether he is low or high risk. However in redistribution system you mostly neglect risk, but concentrate on ability to pay. So such system in order to work has to be compulsory, because otherwise rational individuals would either flock if are those in need or try to avoid joining if they are those who are supposed to sponsor the whole system.

 

[mheslep]

I think the some 1200 waivers of the ACA to various companies and organizations should also be factored into evaluations of the effectiveness of the law.

 

[edward]

I think the some 1200 waivers of the ACA to various companies and organizations should also be factored into evaluations of the effectiveness of the law.

Why just the effectiveness, why not fairness also?

 

[Pythagorean]

So they may not be best, but the way the ACA is being blamed in the media isn’t appropriate. They are really part of a larger trend towards healthcare efficiency that has been going on (well, off and on) for some time. HMO’s, after all, are essentially a very narrow network with a gatekeeper.

Fundamental attribution error is no stranger to politics.

 

[russ_watters]

Here's a now quantified (in a CBO prediction) negative impact of Obamacare:

The head of the nonpartisan Congressional Budget Office delivered a damning assessment Wednesday of the Affordable Care Act, telling lawmakers that ObamaCare creates a "disincentive for people to work"...

The CBO report on Tuesday effectively found that more people would opt to keep their income low to stay eligible for federal health care subsidies or Medicaid. The workforce changes would mean nationwide losses equal to 2.3 million full-time jobs by 2021, the report said.

http://www.foxnews.com/politics/2014/02/05/budget-office-chief-obamacare-creates-disincentive-to-work/

Back in the lat 1980s, my mother upgraded from part time accounting work (payroll for a few small businesses) to a full time job where she would get health insurance, so that my dad could quit his job and start a business. That is the sort of move that would not be necessary/desirable due to the subsidies.

This is the other side of the coin to previous reports of companies cutting worker hours to avoid having to supply health insurance.

Now in the context of this thread, one might argue that this is a good thing for the individuals that it impacts (ie, my mom would have had more time to spend with her family if she didn't have to work full time), but for the economy as a whole it is a clear negative: it shifts people from "giver" to "getter", costing the government direct money in subsidies and the economy lost productivity and money. It is also a clear example of socialism's negatives not necessarily being a matter of laziness (a common way to shout down criticism of the effects of socialistic policies is to wrongly claim opponents are saying poor people are lazy). When the government is offering you money not to work, it would be silly and illogical not to accept it. That's not laziness, it is pragmatism.

This is one of my main complaints about Obamacare - Obama put it together at a time when our #1 economic concerns were (related) high deficits and low employment. His focus should have been on improving what most needed improving.

 

[Pythagorean]

Here's the actual report, rather than a political news station's interpretation of it, for those interested in digging:

http://www.cbo.gov/sites/default/files/cbofiles/attachments/45011-LaborMarketReview.pdf

and a quote from the CBO's document:

Causes of Low Labor Force Participation
According to CBO’s analysis, the unusually low rate of
labor force participation in recent years is attributable to
three principal factors: long-term trends, especially the
aging of the population; temporary weakness in employment
prospects and wages; and some longer-term factors
attributable to the unusual aspects of the slow recovery of
the labor market, including persistently low hiring rates.
Of the 3 percentage-point decline in participation
between the end of 2007 and the end of 2013, CBO
estimates, about 1½ percentage points was the result of
long-term trends, about 1 percentage point arose from
temporary weakness in employment prospects and wages,
and about one-half of a percentage point was attributable
to unusual aspects of the slow recovery.

Here's the line about ACA's effect on employment:

Specifically, by providing
subsidies that decline with rising income (and increase
with falling income) and by making some people financially
better off, the ACA will create an incentive for some
people to choose to work less [24]

But they cite this source:

[24]http://www.cbo.gov/publication/45010

for that claim, which doesn't bring up ACA at all, but the effect of lower tax as an incentives for lower income.

 

[russ_watters]

[sigh]
I know it is en vogue to immediately dismiss/attack a Fox reference here, so I do try to avoid them. Here's what happened in this case:

I saw the story on Foxnews.com. I looked for a related story on CNN.com and didn't find one. I wrote the post in a text file, but didn't immediately post it. Later in the day, I went back and googled for a CNN story (CNN's search function is terrible) and found one, but I didn't alter my post before posting it*. Here's the CNN report:
http://money.cnn.com/2014/02/04/news/economy/obamacare-work/

That report must not have been linked from either the front section or the "Money" front section for very long because I check CNN.com several times a day for the past few days and never could find it except through googling.

What CNN is hammering is this ridiculous op-ed (currently right under the main cover story, but it has been on the front page for three days) that is a strawman attack on a three-year old different argument made by some nameless republicans:
http://www.cnn.com/2014/02/05/opinion/carroll-cbo-obamacare/index.html?hpt=hp_t1
Truly pathetic.

Also right under the header is this ridiculous article that misuses a poorly conceived poll (double-whammy) to spin this as "Bush's fault"(!):
http://politicalticker.blogs.cnn.com/2014/02/06/cnn-poll-is-bush-still-to-blame-for-economy/?hpt=hp_t1
The two-steps of wrongness are:
Step 2: The poll doesn't just say "Bush", it says "Bush and the Republicans". The article does make that clear, but yes that's right, they mis-paraphrase their own poll in the title of their report on it.

Step 1: Why combine "Bush and the Republicans"? Bush has been out of office for 5 years and clearly the current Republicans are doing different things than Bush was doing back then. They are separate entities: it isn't like you can blame Bush for the sequester, for example. It is less of a stretch to combine "Obama and the Democrats", since they are generally working together for the same goals, but even that isn't completely fair.

Terrible poll.

*So. Why didn't I change my source to cite CNN instead of Fox when I found the CNN article saying almost the same thing?
1. It would have wasted my time.
2. CNN doesn't deserve it. They've bungled the issue badly and to cite them would be to support/condone CNN's biased bungling of the issue instead of the fairer coverage by Fox. In short: I chose the Fox article over the CNN article because Fox's coverage is less biased and better quality. Yeah, I really said that: Fox's coverage is higher quality and less biased in this case.

Now.
You cited the wrong report, then inaccurately cited the correct one. Here's a direct link to the PDF of Tuesday's report: http://www.cbo.gov/sites/default/files/cbofiles/attachments/45010-Outlook2014.pdf

There are two appendices dedicated to the ACA, with the relevant one being Appendix C, starting on page 117. It is titled "Labor Market Effects of the Affordable Care Act: Updated Estimates". An excerpt:

CBO estimates that the ACA
will reduce the total number of hours worked, on net,
by about 1.5 percent to 2.0 percent during the period
from 2017 to 2024, almost entirely because workers will
choose to supply less labor�given the new taxes and
other incentives they will face and the financial benefits
some will receive...

The reduction in CBO�s projections of hours worked
represents a decline in the number of full-time-equivalent
workers of about 2.0 million in 2017, rising to about
2.5 million in 2024.

The second quote discusses "full time equivalent workers". The actual number of workers affected will necessarily be much higher, since some who work part time may quit and some who work full time may switch to part time. The net effect is the equivalent of 2.5 million full-time workers leaving the workforce.

The Fox story mostly focused on quoting the CBO official explaining the issue in stark language: "The act creates a disincentive for people to work."

This is a stark demonstration of a fundamental difference between Republican (conservative) and Democratic (liberal) ideals: the safety-nets and other types of support that the government provides that people would otherwise be forced to provide for themselves result in people choosing not to work as much/hard. This is bad for the economy/bad for the country.

 

[Pythagorean]

Ah, I see my second reference was a summary of the PDF, not the full report. Citing the original CBO report in the first place would have been preferable to either CNN or Fox.