In several recent
articles, Ed Morrissey of Hot Air has argued against the ACA in quite
vociferous terms. Unfortunately, his
articles not only misdiagnose the basic problems that led to passage of the
ACA, but offer completely unworkable solutions.
Let’s begin with
his mis-diagnosis, beginning with this:
Before we get to
ObamaCare, let’s recall the rationales for government imposing top-down control
over one-sixth of the nation’s economy. First,
we had to end the issue of the uninsured, which had spiked as a percentage of
the population after the Great Recession, mainly from unemployment.
Yes, Ed, it did spike after the recession. But the rate of uninsured was a 20+ year problem
in the making:
During 1968–1980, the percentage of
persons under age 65 years who had private coverage remained stable at about
79%, while the number with private coverage increased from 140.5 million to
154.1 million persons (Tables 1 and 2). During
1980–2007, the percentage with private coverage declined steadily, except
during 1996–1999. From 1999 to 2007, the percentage of persons under age 65
with any private coverage declined at an average rate of more than 1% per year,
to 67% in 2007; the number of persons with private coverage remained at about
174 million during this period. The downward trend in private coverage was
driven in large part by a decline in employer-sponsored coverage. In 2007, 62%
of persons reported employer-sponsored coverage, down from 71% in 1980.
From The National Health Statistics Reports of July 1, 2009:
Here’s a
chart of the data:
In short,
Ed, the uninsured was a growing problem for decades.
And the quality
of the insurance was decreasing. Most of
the people who previously filed for bankruptcy did due to medical costs, and a majority of those individuals had insurance:
Bankruptcies resulting from unpaid
medical bills will affect nearly 2 million people this year—making health care
the No. 1 cause of such filings, and outpacing bankruptcies due to credit-card
bills or unpaid mortgages, according to new data. And even
having health insurance doesn't buffer consumers against financial hardship.
The findings are from NerdWallet Health, a division of the price-comparison
website. It analyzed data from the U.S. Census, Centers for Disease Control,
the federal court system and the Commonwealth Fund, a private foundation that
promotes access, quality and efficiency in the health-care system.
…..
Even outside of bankruptcy, about 56
million adults—more than 20 percent of the population between the ages of 19
and 64—will still struggle with health-care-related bills this year, according
to NerdWallet Health.
And then there’s the fact that
insurance companies continued to whittle down the risks they covered, largely
by denying coverage to people with pre-existing conditions. So, the only people that were covered were
those who really didn’t need it.
So, to sum up, the health insurance
marketplace didn’t cover an increasing number of people for an extended period
of time. Insurers were legally allowed to
discriminate against people with pre-existing conditions. These two factors meant a
large number of people didn’t get medical care they needed. So, when they were finally able to get that
care, they had a lot of problems that built-up over a period of time. This is called pent-up demand, which isexactly how an insurance executive describes the current situation:
By contrast,
Marinan R. Williams, chief executive of the Scott & White Health Plan in
Texas, which is seeking a 32 percent rate increase, said the requests showed
that “there was a real need for the Affordable Care Act.”
“People are getting
services they needed for a very long time,” Ms. Williams said. “There was a
pent-up demand. Over the next three years, I hope, rates will start to
stabilize.”
Now, let’s look at Ed’s proposal for health care:
The only option
is to repeal it and introduce market-based reforms that eliminate price-signal
opacity, especially in routine care.
I love this option. For non-emergency care, consumers are going
to start calling around to doctors to compare prices. Really Ed?
Let me use a routine physical as an example. First of all, what is supposed to happen at a
routine physical? What tests should be
done? What types of analysis should occur? I honestly don’t know. And, neither do most people. This alone gives dishonest doctors and
advantage: they can advertise the lowest price, do minimal work, and tell the
consumer that, “you don’t need all that other stuff.” Unless the consumer also happens to be a
doctor, he’ll most likely listen to the “learned professional” on this matter,
pay little money and receive sub-standard service. And, what about the idea of having a doctor
who actually knows you and your family history?
Doesn’t that provide an asset to the patient that Ed’s system would
completely obliterate? And just how will be learn about prices, Ed? Wouldn't an exchange (like what we currently have and that was originally proposed by Republicans in response to Hillarycare in the mid-1990s) be the best place to accomplish that?
And then there’s the huge glaring problem of when most people access
medical care: when they need it, and so are therefore at an extreme negotiating
disadvantage. Let’s say you break your
arm. Under Ed’s scenario, this might not be considered
a catastrophe, and so would fall out of coverage. Are you going to call around to every doctor
to get a price quote on that?
Dear Ed: take it from someone who not only knows economics but also designs insurance programs for a living: you don't know what you're talking about.
