


The boosters, of whom Krugman [1] is a lucid example, have been talking up new health care law, generally called the Affordable Care Act (ACA). They make good points. Some people with pre-existing conditions are covered who weren’t before. Those under-26 year-olds whose parents are insured are able to retain coverage on their parents’ policies. These are good things.

They are also drops in the bucket. After two years of weeping, wailing, and gnashing teeth, the richest country on earth managed to extend a bit of expensive complicated coverage to a fraction of its population. And that’s the good news. The point at which we all become captive customers of the insurance industry is still two years down the road. That’s when we find out what the tiny expansion of coverage is going to cost us.

The indications so far are not good. For instance, in the case of honest — or strictly regulated — insurance, providing it to everyone is cheaper because healthy people are in the pool as well as sick people. That should lower the currently stratospheric US premiums. In addition, the law has a number of stipulations [2] that would limit insurance companies’ ability to raise premiums at will once the law goes into full effect in 2014. So what do they do? Raise premiums at utterly absurd rates [3] before that. That way they can have high rates and captive customers after 2014. Wheee!

We are also reassuringly told that everything will continue as before, except the uninsured will be covered. It’s to be expected that some employers near the financial edge will drop their current coverage and their workers will have to use the ACA pools. The Congressional Budget Office estimated how many might do that. Initially it was around 2%, later updated [4] to be slightly higher. A year later, a poll by IPSOS asked employers what they planned to do. The numbers came back: 30%-50% of employers said they planned to drop coverage [5].

That number was disputed. Some commissioned their own survey [6] from a company called Avalere. They said a more realistic number was -0.3% to 8.5%.

“Avalere offers three reasons for why employers will continue providing insurance: 1) to recruit and retain employees, 2) historically there has been no viable alternative for employees to obtain comprehensive coverage on their own, and 3) boost worker productivity. “

Yes. And the Tooth Fairy leaves you silver dollars these days. I’ll take the points in turn.


Okay. I’m back.

Then, just today, I saw yet another scam in the making which I’d never imagined. “[H]ealth insurers offering new type of self-insurance for firms with as few as 25 workers are gaming the system [8] and may undermine a key goal of the federal Affordable Care Act.” More quotes from the LATimes article:

Self-insurance is attractive for many reasons, particularly the prospect of lower costs. It’s exempt from state insurance regulations such as mandated benefits….

Self-insured plans have an immediate cost advantage since there’s no state tax on insurance premiums being passed along by an insurer. Starting in 2014, they will also avoid additional fees levied on health insurers to help pay for the federal healthcare law.

Small businesses switching to self-insurance do gain more insight into why their medical costs might be rising so fast because they have access to detailed claims data. … [C]ompanies like the ability to see whether their employees’ use of healthcare is above average and to make changes in the benefit package to bring those costs in line.

What could possibly go wrong?

None of this even gets into the whole individual mandate rat’s nest, which the Supremes will start to address on Monday. I’m a liberal with a head so pointy you could hurt yourself on it. I believe the government must regulate and support lots of things [9]. I have no problem with paying taxes that go to Medicare or Medicaid. But even I have a problem being told to fork over money to private companies over whom I have zero control. Not even the miniscule control of not buying their product, after ACA goes into effect. And that for the same industry imposing 60% price increases [3] when it thinks it can get away with them.

That health law mess was the “realistic,” “politically feasible,” “doable” path. Not like Medicare for All [10]. That would simply cover everybody at half the price. That’s just Not Done.