There are still at least two ways for conservatives to fight the implementation of ObamaCare. Thanks to the stupid ideological ruling of the Supreme Court, the states don’t have to accept federal money and expand Medicaid. They can just let their poor suffer. The states can also refuse to set up any health care exchange.
As Jonathan Cohn helpfully explains, you can think of the state health care exchanges as websites like Expedia or Travelocity. But, instead of renting a car or booking a hotel room or flight, you are shopping for a health insurance plan. You will also be eligible for a rebate if your income is low enough. In some cases, the entire cost of your health care plan might be covered, or, more likely, you might just be enrolled in Medicaid.
In refusing to set up a state health care exchange, the Republican governors don’t prevent their citizens from accessing ObamaCare. The law allows the federal government to set up the exchanges for them. In this respect, the citizens of Oklahoma, for example, won’t have a different experience from the citizens of New York or Massachusetts or California. However, James Capretta and Yuval Levin argue in today’s Wall Street Journal that the law won’t function if the states don’t create their own exchanges.
Congress didn’t allocate money for administering federal exchanges, and the law as written seems to prohibit federally run exchanges from providing subsidies to individuals. The administration insists that it can provide those subsidies anyway. But if the courts read the plain words of the statute, then federal exchanges couldn’t really function.
So, this issue will head to the courts where it will be decided whether or not there was some kind of legislative miscue that undermines the clear intent of the law.
It is important, however, to understand what Capretta and Levin are arguing. They are saying that the federal government can set up the exchanges but they have no money to administer them and no authority to send rebate checks to policy-holders who sign up on federally-created websites. So, for example, someone in Oklahoma could sign up for a policy but no one could process that transaction. And, if they did process it, no one in Oklahoma would be receiving the rebates. I think you can imagine how popular this will be with the people of Oklahoma.
The hope, obviously, is that by creating chaos in the implementation of ObamaCare, the Republicans can keep the program unpopular in their states.
How do you think that is going to work out?
I think that Medicare for All is going to be a major campaign issue in 2014. Let’s hope that we can get it explained to voters before Fox and Friends does. The big problem with Obamacare is that it has been too complex to explain, it requires folks to do something they don’t necessarily want to do, and the financing is so complicated, it can be demagogued.
People understand Medicare and they understand Medicare for All. They just will have questions about how we are going to pay for it. And of course, the private insurers will be fighting it tooth, nail, and bought-out Democrat.
Not really. People think Medicare covers everything when in fact it has substantial deductibles and co-pays. People confuse Medicare with Medicaid.
Exactly why we should have Medicare for All, without deductibles and co-pays. Patients cannot police health care provider costs; it just doesn’t work because of the asymmetry of expertise.
Most folks think Medicaid covers minority poor folk until their grandma has to go to a nursing home. Then they’re shedding grandma’s assets to qualify.
How much more craziness can we legislate into the system?
The only rational reason for deductibles and co-pays is to ration consumption. Demand for health care tends to be very elastic, and without some direct cost, demand tends towards infinity – or at least a very rapid expansion in the volume of demand for healthcare services overall.
In addition, if demand outstrips supply, the cost per item of service also tends to inflate. European public health care systems have a lot of experience of demand and cost expansion management, but it often involves unpopular (and inefficient) waiting lists and cutbacks in benefits/services.
It’s not impossible, but the management of healthcare costs is difficult without some incentive for consumers to think carefully and make sure they actually need it before accessing a service.
That is the conventional economic argument about the market basis of healthcare. In fact, demand is only elastic to the extent that providers make it so. Because providers advise patients of what additional health care services they need.
The issue of “consumers”, i.e. patients, to think carefully before they actually need it is actually a service that a good health care service needs to provide. In the US, there is a service that a lot of physicians provide called an “advice nurse”, who can triage patient complaints and advise when an office visit is necessary.
Booman Tribune ~ Comments ~ Sabotaging ObamaCare
Not quite true in the sense that “patient pressure” and persistence can also be a factor – generally in a very positive way, although one that can also increase costs.
However the perhaps more relevant point is that physicians are the “gatekeepers” to a lot of more specialised and expensive services, and if they are financially incentivised to increase referals because they generate repeat business and sometimes harvest Pharma incentives etc. then the overall cost can mushroom for possibly quite marginal increase in benefits to patient outcomes.
The bottom line is that volumes increase dramatically if providers are rewarded on a per item of service as opposed to a salaried basis. That is why public healthcre systems tend to cost a lot less than private ones.
Patient pressure doesn’t exist in a vacuum. There are lots of complex reasons for it, and providers (and advertisers) know what a lot of those reasons are. It would be just as effective to deal with it outright. But demand is nowhere near infinite, far from it. Most folks want to deal with the health care system as little as possible, even when services and costs incentivize otherwise.
People in Red States don’t want Obamacare. They think it is just a Death Panel. If idiots who believe Republicans don’t want it that’s fine! We can have it here in the Blue States and the cost will be less because we won’t have to subsidize poor Republicans. Remember, these idiots thought ROMNEY was going to create jobs for them by cutting taxes on the rich and raising theirs while cutting Medicare and Social Security. Until they grow a brain I’m not going to worry about them.
Nobody in Oklahoma is going to vote blue, so why worry about our enemies?
There are no red states; there are no blue states. People who watch nothing but Fox, no matter where they live, have been propagandized to think Obamacare is death panels. The amount of rightwing money in radio and TV to promote this continuously over the last three years is staggering.
Radio silence means disenthrallment. Only there hasn’t been that yet. That is why they keep doing it.
Sure there are. I’ve been in them. I’ve LIVED in them. If I never hear “Damnyankee” again it will be too soon.
You should choose your red states more carefully. Might I suggest Wyoming.
I live in one right now, North Dakota, and while you’re right that I don’t WANT Obamacare, it’s because I WANT single-payer. But Obamacare is all we’ve got right now and given the choice between that or nothing I would like to use that.
But still probably screwed.
Oh yeah and “nobody is Red State X will vote blue”?
I voted for Heidi Heitkamp. Does THAT matter?
Let’s remember there are ‘blue’ people in every state in the country, and they are not the enemy; they are the screwed — and that’s the real tragedy. At least we now know why they’re blue: they, like many of us, are holding their collective breath waiting for single payer.
I think that the hospital associations and providers certainly do want ObamaCare especially in a state like Texas where 25% of people are uninsured.
The cost of uncompensated care is so high in Texas that the average cost to subsidize this per family is a good $500 higher than the rest of the country. Providers take huge losses and will lobby Gov. Good Hair to expand Medicaid on the down low.
The article assumes that those states will be dealing with the Obama of 2009. This term’s Obama won’t let Lucy have the football.
Time will tell. I don’t think a lifetime of being a conciliator can turn on a dime and turn Obama into LBJ.
I’m waiting. But Mary Landrieu and Kay Hagan, among other squishy Dems haven’t changed their tune.
We were talking about secession last week. Now we will be going back to an even older controversy, nullification.
Who writes legislation that doesn’t include provisions for funding? If that’s true, then the ACA is doomed. There’s no way Wisconsin, or the 30 other Red states, are going to fund exchanges, and there’s no way the Republican Congress is going to fund exchanges either.
ACA was always an extremely unpopular piece of legislation. It looks like it’s just going to die, at least in most of the country.
I’m quite sure it will live in NY, NJ, IL, VT, CA, OR, and WA. Probably others.
Just last week I heard Senator Sanders saying that Vermont is applying for a waiver to try single payer. I’d love to move their if I didn’t hate snow.
I would totally move to VT. I mean, Bernie Sanders lives there, and Ben and Jerry’s got started there. This just seals the deal…
GRRR! @#%& spellcheck. Of course I meant “there”.
NJ will be interesting. I don’t see how Christie allows exchanges and still runs for the Republican nomination in 2016, but maybe that’s not his plan.
NY has a pretty tight balance in the state house. I suppose there are still moderate Republicans upstate, so the exchanges should go through, but it may not be a sure thing.
It’s easy. After 2014, one way or the other, it’s dead as a political issue.
Interesting. Would you care to explain your conclusion?
Almost no major legislation is actually written with sufficient funding. It’s part of the horse trading that goes on to get a bill passed. The real policy-making happens in the implementation phase, not the high-profile legislative drama. The Clean Air and Clean Water Acts are good examples of this. Although the EPA has wide, independent powers to determine what should be regulated and how to do it, as a pragmatic matter it cannot actually regulate very much directly because it has never been provided sufficient resources to do so.
As a result, the EPA has set up an ingenious system of coercion and reward between itself, state-funded pollution control agencies, and environmental advocates in each state. The EPA’s powers allow it to directly regulate environmental contamination which would eliminate jobs for most of a state-level pollution control agency’s staff if they did (and they do in some states such as Idaho). But pollution control agencies are major employers of environmentalists and environmental scientists who all have strong interest as well as values based incentives for pressuring legislatures to fund environmental regulation at the state level, and the EPA provides some grants to make it less expensive when they do. The EPA maintains the threat of putting them out of business if they don’t keep sufficient pressure on state legislatures, but at the same time, everyone knows that the EPA is bluffing because they don’t have the financial resources to directly regulate more than a couple of states. They’re like a cop with two bullets threatening 10 criminals that he is going to shoot them if they don’t surrender.
As a result, it has been a 30-year process to slowly gain the cooperation of more and more parts of society in improving air and water, now only recently being focused on agriculture and carbon emissions after having tackled the more acutely dangerous emitters first. But overall, the EPA’s strategy for implementing such wide program without sufficient resources provided by Congress and in the face of substantial opposition is a bureaucratic success story, and shows how the Dept of Health and Human Services has good road maps for implementing ACA over time against opposition and without legislated resources. So no need to despair — it’s all part of the process which is far from over.
I think it is going to work out terribly for them, but there is an interesting part of the state versus federal exchanges issue here. State exchanges were always a problem because they benefit insurance companies at the expense of the insured by segmenting insurance markets into state-level markets. That is why federal funds for federal exchanges, in the language of the ACA, were not provided and/or prohibited, in order to gain enough support from insurers.
However, by refusing to set up a state exchange, and thus forcing the federal government to do so and thereby force a court versus bureacratic implementation contest, the result could conceivably result in exactly national-level insurance exchange that insurers hoped to avoid. For example, the federal government could avoid the prohibition on use of federal funds to set up such an exchange by contracting with a non-profit consortium of private insurers to do so, with expenses paid by fees of participants in the exchange.
I prefer a state market with state insurance regulation. Federal insurance oversight has been historically weak. That’s why Republicans always push for interstate insurance sales. The insurance companies will set up in someplace like South Dakota that won’t care if people in other states are ripped off as long as they get a piece of the pie ala the credit card business. Being a very small state, crumbs count as a piece of the pie.
It’s all in the math. At a state level there are few insurers, and the low numbers of prospective enrollees in each state limit the competitive entry of more insurers into the market. As a result, insurance can charge higher premiums, and medical and drug providers have more leverage and can charge higher prices. As a result, state level markets keep the cost of healthcare going up. This was the major criticism of ACA from the left, not the Republicans. For most people, the gain of significantly lower prices for healthcare outweighs the minor benefits of local control over insurance regulation, and smaller states benefit more than bigger ones from a national market.
Well all I heard from Republicans was, “Open the insurance market to 50 states and cap lawsuits.”
State insurance markets are classic examples of regulatory capture. Federal legislation has been weak because states moved to regulate insurers first.
That’s where it will probably go – to a format that doesn’t require much federal funding. Already they’re working on setting up two plans with a direct relationship to the feds. They apparently think they have funding for that. And there should be plenty of insurance companies that want in on a federal exchange given how big it’s going to be.
I remember reading somewhere that there is nothing to prevent Obama effectively implementing a public option BY EXECUTIVE ORDER simply by instructing the Federal agencies currently providing health cover for Federal employees to do so for all citizens.
Provided the premiums paid are adequate to cover administrative and claim costs, no Congress approved funding would be required. If done efficiently, the premiums would be considerably less than private insurers as there would be no need for profits for shareholders, and a reduced need for a marketing budget.
Merely the threat of such an Executive Order should be enough to bring the private insurers on-side, whatever about wing-nut led states. It would indeed be ironic if Obamacare provided much improved health coverage at reduced costs for blue states only. I think we would see more than a few red states turn purple sooner rather than later.
Federal employees are covered by private insurance companies. In any geographical area, there may be several plans for the employees to chose from. So that would not be a public option.
But it would be a damned good one. One big problem is cost, the federal government heavily subsidizes FEHB. If one were to pay the full premium it would be around $1100 to $1300 per month. OTOH, many people pay that now for considerably less coverage.
Well, there will be an opportunity to compare results. With our Democratic supermajorities in California, for instance, we can start turning our state into a socialist dystopian nightmare, and meanwhile the Republicans can keep turning Oklahoma into a libertarian shithole, and then we’ll just see which state’s citizens are more satisfied with their health coverage.
Your use of “socialist dystopian nightmare” and “libertarian shithole” reminds me of the cartoon where Hitler and Stalin cordially greet each other over the corpse of Poland.
Hitler: “The scum of the earth, I believe.”
Stalin: “The bloody assassin of the workers, I presume?”
I’m not familiar with the legislative text, but I would think that administrative rulemaking could provide a potential end-around in this situation, providing yet another situation in which the Executive Branch is forced to aggregate power in response to a broken and ineffectual Congress.