Tag: affordable care act

55% of Americans Say Free Market Competition Offers “Better Way” to Provide Affordable High-Quality Health Care

In his call to repeal the Affordable Care Act, also known as Obamacare, House Speaker Paul Ryan contended “there are two ways of fixing healthcare…have the government run it, ration it, and put price controls…[or] have a vibrant free market where people…go out in a free market place and buy the health care of their choosing.”

A new survey from the Cato Institute finds that 55% of Americans believe “more free market competition among insurance companies, doctors, and hospitals” offers the “better way” to provide affordable high-quality health insurance to people. In contrast, 39% say that “more government management of insurance companies, doctors, and hospitals,” would better achieve this goal.

Full Results

Respondents sort themselves along partisan lines. A majority (62%) of Democrats including leaners think that more government management of insurance companies, hospitals, and doctors is the better approach to health care reform. In contrast, majorities of non-partisan independents (57%) and Republicans including leaners (84%) think free market competition offers a better alternative.

The divide between Republicans and Democrats widens as they attain higher levels of education. Fifty percent (50%) of Democrats with high school degrees believe that free market competition would better provide high-quality affordable health care. However, this share drops to 17% among Democrats with college degrees—a 33-point swing. The share of Republicans who believe free markets better deliver high-quality affordable coverage increases from 81% among those with high school degrees to 94% among college graduates. Non-partisan independents’ attitudes don't change much with education.

These results are consistent with the theory that partisans become more likely to learn about and accept partisan cues on health care policy as they gain more political information. Independents, on the other hand, feel less inclined to accept partisan cues regardless of their political knowledge.

This is not the only survey which finds Americans prefer a free market approach to reducing costs in health care.  A Kaiser Family Foundation survey found that 51% of Americans thought free market competition would better reduce prescription drug prices than government regulation (40%).

For decades Americans have debated how to best provide access to high-quality affordable health care. Some argue that health care markets operate differently and thus require more government management to ensure people get the care they need. Others contend that, just like in other sectors, injecting free market forces into health care would incentivize lower costs, increase quality, and expand access.

These results indicate public appetite for taking a new approach to health care reform: injecting free market forces into the system in order to provide access to affordable high-quality health insurance.

Survey results and methodology can be found here. The Cato Institute in collaboration with YouGov conducted two health care surveys online February 22-23, 2017. The first survey interviewed 1,152 American adults with a margin of error of ± 2.93 percentage points. The second survey interviewed 1,103 American adults with a margin of error of ± 2.85 percentage points. The margin of error for items used in half-samples is approximately ± 5.1 percentage points.

Poll: Support for Obamacare’s Most Popular Provisions Plummet if Quality of Care Threatened

Support for the ACA’s community-rating provisions flips from 63%-33% support to 60%-31% opposed if it harms the quality of health care. 55% say more free-market competition not government management would best deliver high-quality affordable health care. FULL RESULTS (PDF)

Most polling of the Affordable Care Act finds popular support for many of its benefits when no costs are mentioned. However, a new Cato Institute/YouGov survey finds that support plummets, even among Democrats, if its popular provisions harm the quality of health care. The poll finds that risks of higher premiums, higher taxes, or subsidies to insurers are less concerning to Americans than harm to the quality of care. 

By a margin of 63% to 33%, Americans support the ACA’s community-rating provision that prevents health insurers from charging some customers higher rates based on their medical history. However, support flips with a majority opposed 60%-31% if the provision caused the quality of health care to get worse.

Majorities also come to oppose the ACA’s community-rating provision if it increased premiums (55% oppose, 39% favor), or raised taxes (53% oppose, 40% favor). However, threats to the to quality of care appear to be a pressure point for most Americans.

Could It Be Unconstitutional to Raise the Obamacare “Tax” for Not Purchasing Health Insurance?

As many predicted, especially us at Cato, the Affordable Care Act is beginning to make health insurance less affordable for many Americans. Part of the problem, in a nutshell, is precisely what my colleague Michael Cannon described in 2009, the young and the healthy avoiding signing up for health insurance and choosing to pay the fine, or, as Chief Justice John Roberts would call it, a tax.

MIT economist Jonathan Gruber, often described as an architect Obamacare, recently said that some of these problems can be alleviated by increasing the “tax” on those without insurance. “I think probably the most important thing experts would agree is we need a larger mandate penalty,” said Gruber.

Depending on how high the penalty goes, there could be a constitutional problem with that. In the opinion that converted the “penalty” into a constitutional “tax,” Chief Justice Roberts described the characteristics of the “shared responsibility payment” that made it, constitutionally speaking, a tax rather than a penalty. One of those characteristics is that the penalty was not too high: “for most Americans the amount due will be far less than the price of insurance, and, by statute, it can never be more. It may often be a reasonable financial decision to make the payment rather than purchase insurance, unlike the ‘prohibitory’ financial punishment in Drexel Furniture.” In Drexel Furniture, also known as the Child Labor Tax Case, the Court struck down a 10 percent tax on the profits of employers who used child labor in certain businesses. One reason the Court struck it down was because its “prohibitory and regulatory effect and purpose are palpable.”

Wave of Health Insurance CO-OPs to Shut Down in Latest ACA Failure

Hundreds of thousands people will lose their insurance plans as a raft of health insurance cooperatives (CO-OPs) created by the Affordable Care Act will cease operations. Just last week, CO-OPs in Oregon, Colorado, Tennessee and Kentucky announced that they would be winding down operations due to lower than expected enrollment and solvency concerns (although the one in Colorado is suing the state over the shutdown order).  They join four other CO-OPs that have announced that they would be closing their doors. In total, only 15 out of the 23 CO-OPs created by the law remain. These closures reveal how ill-advised this aspect of the ACA was both in terms of lost money and the turmoil for the people who enrolled in them. The eight that have failed have received almost $1 billion in loans, and overall CO-OPs received loans totaling $2.4 billion that might never get paid back. In addition, roughly 400,000 people will lose their plans.

Sources:  Sabrina Corlette et al. “The Affordable Care Act CO-OP Program: Facing Both Barriers and Opportunities for More Competitive Health Insurance Markets,” The Commonwealth Fund, March 12, 2015; Erin Marshal, “8 Things to Know About Insurance CO-OP Closures,” Becker’s Hospital Review, October 20, 2015. Created using Tableau.

Notes: Hawaii and Alaska not shown. Neither state had a CO-OP. CoOportunity Health served both Iowa and Nebraska.

ACA’s Looming IPAB Test

Yesterday, in a move being described as “a major shift,” the American Cancer Society changed its guidelines on when and how often women should undergo professional physical exams and mammograms for breast cancer.

Under previous guidelines that the organization had trumpeted for years, women “of average risk” were to begin both at age 40 and repeat them every year. Now the ACS is recommending annual mammography start at age 45, cutting back to once every two years at age 55, and eliminating the screen altogether when a woman’s future life expectancy falls inside of 10 years. As for the physical exam, the ACS no longer recommends it at all.

The reason for the change is that both screens provide so many stressful false positives that the ACS doesn’t believe regular testing passes a cost-benefit test unless the woman is of “higher than average risk.”

The shift should be welcome news for women. Mammograms and doctor breast exams are charitably described as “uncomfortable,” and probably more accurately described as “painful and embarrassing.” But the ACS change could become painful and embarrassing for the architects of the 2010 Patient Protection and Affordable Care Act (ACA).

One of the most scrutinized provisions of the ACA is the creation of the Independent Payment Advisory Board (IPAB), whose ostensible job is to recommend cost-containment measures if Medicare expenditure projections begin to outpace a previously determined growth rate. In reality, IPAB is to monitor the cost and effectiveness of various types of care to determine which will be covered by Medicare, with the expectation that those decisions will serve as a template for private health insurers and other third-party payers. The hope is that IPAB’s decisions will eliminate coverage of procedures that don’t measure up, thereby “bending the cost curve”—that is, reducing the nation’s overall spending on health care.

IPAB has been derided by critics as a “death panel” that could eliminate crucial care, and criticized by more thoughtful scholars as an unaccountable rationing board that will inject itself in decisions that ought to be private. In contrast, I’ve argued that IPAB is more likely to be a paper tiger that may occasionally block some treatment or another, but will usually cave to political pressure and approve popularly appealing procedures and treatments that pass no reasonable cost-benefit test. Those decisions will then pressure third party payers to also cover the care. That way, IPAB will bend the cost curve—just in the opposite direction from what the ACA writers intended.

So think of the ACS shift as a looming test of IPAB, as not-recommended breast cancer screenings are exactly the sort of Medicare expenditure the board should identify for elimination. So far, the “projected expenditures” provision for the board (or the secretary of health and human services, acting in IPAB’s stead) has not been triggered, so no cost-containment recommendations are currently forthcoming. Thus give IPAB an “incomplete” on this test for now—but don’t expect a good grade later.

The Obamacare Giveaway, Connecticut Edition: Earn $62k and Get Health Insurance for less than $58/Year

Several days ago, I pointed out that a married couple earning $62,000 in Wisconsin could get health insurance under Obamacare with no monthly premiums. Now it’s time to move onto Connecticut. Connecticut runs its own exchange, known as access health CT.

Among the 114,000 individuals aged 55 to 64 in Fairfield County, Connecticut, roughly two-thirds – or 77,000 people – rely on employer coverage, where the odds are high that they’re paying something out of their own pocket for monthly premiums.

Consider married couple earning $62,000. Each is 64-years-old, a non-smoker, and lives in Fairfield County, Connecticut. The structure of Obamacare subsidies means that many individuals who are not poor can find health plans with such large subsidies that they pay virtually nothing for premiums out of their own pocket. In this case, the couple would qualify for the HealthyCT Bronze Basic HSA 1 Plan for $4.79 per month in premium – or $2.40 per month for each person in that household. If the couple chooses this plan, it pays less than 0.1% of its total income towards health care premiums. That’s not a typo – and it doesn’t say one percent – the household would pay one-tenth of one percent of their income towards premiums. Subsidies pay for more than 99% of the monthly premium.

See the graphic below for this married couple:

Was the Halbig Decision Political?

Writing in the Washington Post about the D.C. Circuit’s decision in Halbig v. Burwell, E. J. Dionne Jr. bemoans 

a conservative judiciary that will use any argument it can muster to win ideological victories that elude their side in the elected branches of our government.

There are several problems with his argument. First, of course, the argument accepted by two judges on the D.C. Circuit is pretty strong: the IRS can’t rewrite a law just because because the law isn’t working out so well.

Second, it’s not so clear that it’s conservatives who couldn’t “win ideological victories … in the elected branches of our government.” Democrats in Congress and other ACA supporters wanted states to establish exchanges, so they wrote the law with subsidies for state exchanges. (See also this original paper by Michael Cannon and Jonathan Adler, especially pp. 142ff.) But because of widespread opposition to the law, many states chose not to set up exchanges. That is, supporters of the law were unable to “win ideological victories … in the elected branches of our government,” so they turned to the unelected bureaucracy to rewrite the law, and now they want the courts to uphold their end run around the legislative process.

Third, I wonder if E. J. Dionne Jr. really wants a judiciary that rolls over for the political branches, whether legislative or executive. Does he believe that the Warren Court should not have struck down school segregation, which was clearly the will of the people’s elected representatives–and no doubt the people–in Kansas, as well as in South Carolina and Virginia, whose similar cases were combined with Brown? Does he believe that the Supreme Court was wrong to strike down Virginia’s law against interracial marriage in 1967? The Texas law outlawing sodomy in 2003? Does he regret the Supreme Court’s reining in of the Bush administration’s claimed powers in several terrorism cases? Or the court’s 2013 rulings on gay marriage?

Probably not. And that’s why we should judge judicial decisions on the basis of their adherence to the law and the Constitution, not on political grounds. Three cheers for judges who uphold the rule of law without fear or favor and without political intent.

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