November 27, 2012

A few things they don't tell you about Obamacare

Yves Smith, Naked Capitalism - Let’s start with some of the inaccurate praise heaped on the ACA:

It covers the uninsured. No, it only cover some of the uninsured. The CBO scored the ACA as leaving 30 million still uninsured as of 2022.

It will cover people with preexisting conditions. Um, maybe, until you need costly care. The ACA preserved a loophole you can drive a truck through: But the bill has a giant loophole: insurers can continue to cancel policies in the case of “fraud or intentional misrepresentation” as they do now. And the bar for fraud, per established case law, is remarkably low. Forgetting to tell your insurer about a past ailment, no matter how minor, qualifies. Say you forget to tell your new insurer that you had acne or a concussion in your teen years. That will more than do.

Insurers NOW frequently go over the records of people who have costly conditions or major surgeries with a fine toothed comb looking for ways to rescind policies. For instance, in 2010, Reuters reported:
WellPoint was using a computer algorithm that automatically targeted them and every other policyholder recently diagnosed with breast cancer. The software triggered an immediate fraud investigation, as the company searched for some pretext to drop their policies, according to government regulators and investigators.
WellPoint appears to have overstepped by using pretty much any weak excuse to rescind policies. But the low standards of the fraud out mean that there’s still plenty of room to drop coverage, particularly for patients over, say, 35, who have enough of a medical history that they can easily forget a minor ailment that their insurer finds and uses to ditch them. Remember, most people who undergo a medical bankruptcy had insurance.

Your health care will be (mainly) covered. Hahaha. I know high functioning people (as in couples where both spouses had advanced degrees, and one was on the board of a major medical devices company) who’ve been stuck with huge hospital bills. They’d thought everything was covered, and somehow items that were in the tens of thousands (in one case, totaling $75,000) wasn’t. And then there’s the “out of network” problem, highlighted this weekend by a New York Times story of parents who had a baby that had trouble sleeping and the pediatricians they saw were at a loss. The doctor who specialized in that sort of problem didn’t accept insurance. While he was able to help the baby, the parents had to foot all of the $650 bill.

Health insurer profit margins are capped. That is technically accurate but substantively misleading. The health insurer have been engaged in price gouging over the last two decades. Health insurers as of the early 1990s spent 95% of health care premiums on medical expenditures. They now spend less than 85%. The ACA requires them to spend 80% on health care costs. So the bill institutionalizes an egregiously fat profit margin.

Now if that doesn’t sober you up, consider a few more factoids: the ACA does indeed extend insurance to a large pool of formerly uninsured, and subsidizes insurance to lower income individuals. This should increase demand for health care services. At the same time, more and more doctors are opting out of taking insured patients, largely because they can’t stand the cost and hassle of fighting insurers to get paid. For instance, dermatologists want to do Botox and dermapeels, not acne. Endocrinologists are converting their practices to anti-aging. In New York City, it used to be not too difficult to find a pretty good primary physician. That is no longer true. When my old MD quit practicing (while I was overseas), the insane array of referrals I got for his replacement would make for a Woody Allen movie.


Anonymous said...

Meanwhile, in Canada and many European countries, all the above nonsense does not exist, the stress associated with ensuring health care coverage for one's family is not an issue, and so-called "pre-existing conditions" are not even part of the dialogue.

One state, maybe one of the smaller ones, is going to have to push forward with a single payer plan. It is a winning political position.

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