Obamacare Beneficiaries Skip Care
Kaiser Health News covers an issue we’ve discussed:
A key goal of the Affordable Care Act is to help people get health insurance who may have not been able to pay for it before. But the most popular plans – those with low monthly premiums – also have high deductibles and copays. And that can leave medical care still out of reach for some.
Renee Mitchell of Stone Mountain, Georgia is…… generally pleased with her insurance — a silver-level Obamacare plan. It’s the most popular type of plan with consumers because of the benefits it provides for the money. But she still struggles to keep up with her part of the bills. She is not alone. (Jim Burress, “Some Insured Patients Still Skip Care Because of High Costs”, June 10, 2015).
Here’s something to think about: Every penny of the billions of dollars taxpayers are paying to underwrite Obamacare goes to health insurers, either as premium tax credits via exchanges or cost-sharing subsidies for low-income households. Not one penny goes to the beneficiaries directly, so they can decide themselves which health goods and services to pay for.
Providing affordable healthcare was secondary to supporting the insurance industry. Obamacare sufferers can get great care in places like Cuba, Mexico, Argentina and Brazil for less than their annual deductible, in many cases. Dental care too.
John, you are correct in repeating one of the goals of this blog for a long time — namely, that a combination of well funded HSA’s and catastrophic insurance would make a better health care system.
Furthermore, you imply (as I think Dr Goodman did) that federal funds should in some way help low-income and middle income Americans to fund their own HSA’s. They sure have not been able to do so on their own!
So that raises a big practical question: how do you give people HSA funds but also make sure that the money will actually go toward health care?
Look at what happens to 401K plans. Vast sums are cashed out during job changes, and never available at retirement.
You can’t protect people from everything.
Independent of who is on the hook for premiums and to what extent, can deductibles and OP expenses decrease from any other source besides competition between providers?
Jay, I think what you suggest is right.
Medical care expenses can decrease within the delivery system itself. Sources of decreasing cost would include competition among facilities and professionals, but larger opportunities exist in other areas, e.g., pharmaceuticals; durable medical equipment; high-tech applications in diagnostics, surgery, other therapies; and more.
Medical expenses might also decrease if demand decreased. That would require large-scale behavioral changes by the general public. Possible. Not likely – in my lifetime, anyway.
Insurance techniques, ‘frinstance tinkering with deductibles, only change how expenses are shared. Even the optimal sharing scheme cannot affect the underlying cost of delivering the care in the first place. But our big problem is not how we share the cost – it’s the underlying delivery cost itself.
Our now decades-long confusion of medical cost with insurance cost Is not even academic – it’s real, because its baked into Obamacare. In other words, Obamacare is primarily an insurance contraption. It does almost nothing to reduce the cost of medical delivery or, as the president once promised, “bend the cost curve”. Obamacare does not address our problem. Early signs of its inevitable failure have already appeared.
it sure wouldn’t hurt if our political and other so-called thought leaders would keep medical cost analytically separate from insurance cost. Moses escaped his wilderness in 40 years. Yeah, OK, medical cost is a more difficult problem. But still, the U.S. has stumbled around for more than 50 years in our medical cost wilderness and we seem no closer to escape than we were in 1965.
Well, they do compete against each other. However, because there is no price competition, the competition is malformed.
Note to Jay:
Deductibles could decrease tomorrow morning with aggressive legislation. France has no deductibles for diabetics. Germany I believe has no deductibles for childbirth. Several other nations cap deductibles at the rough equivalent of $1,000.
I am not saying that this would necessarily be wise legislation. But Americans tend to underestimate the power that they could have over insurance companies, if insurance was regulated federally and aggressively.
Thank you, but we don’t need “power over insurance companies.” We need the government not to pass laws giving insurance companies power over us!
You can lead a horse to water by that doesn’t make him a duck.
I hope that is relevant to the topic. Please clarify.
When one is a simple free ranging horse (the medical consumer in this case), he or she may wander up to a cool and clean watering hole (subsidized govt provided health insurance). However, once presented with this seemingly attractive place to nourish itself with life sustaining water, this doesn’t necessarily make the horse (medical consumer) a duck ( a knowledgeable medical consumer with skin in the game who makes appropriate life choices). I think it’s quite obvious john.
Okay, I am with you – very poetic.
In essence, a subsidized Obamacare beneficiary is a completely different animal from an HSA healthcare consumer, for example, who must be knowledgeable in their medical choices because they have skin in the game. Both animals, true, but still a horse and a duck. It’s possible my Mayberry-Esque colloquialisms are lost on you city folk, but It make sense to me.
Agreed. One very disappointing aspect of Obamacare is that not one penny of subsidy goes to patients directly, but only to insurers.
Note to John F — thanks for your perceptive comments on medical costs.
Just curious:
Do you attribute the higher costs to which of the following:
a. higher unit prices for the same treatments (this is certainly true of some drugs);
or
b. more volume of the same procedures, even if prices are constant (this is true of tests like colonoscopies I think)
or
c. brand new treatments, priced very high
Probably some mixture of all three, but await your comments.
Bob, your Q’s focus on prices rather than delivery cost. In this, you sorta illustrate the point of my earlier comments.
And John Graham observes that in medical care, “because there is no price competition, the competition is malformed.”
I think trying to understand the cost of medical care by focusing on prices is looking in the wrong place. I think the right place is the delivery cost itself. Consider:
Does the price charged for a treatment affect the cost of delivering the treatment? I think history shows that quality however measured often improves and seldom declines as a given service provider’s volume increases; what happens to the provider’s delivery cost when volume increases? Does the price of a brand-new treatment affect the cost of delivering that treatment? Do new medical technologies tend to raise delivery costs or diminish them? And besides, wouldn’t any new treatment that did not replace an older therapy always increase overall costs, even if priced “low”?
Explaining medical insurance cost trends in terms of charges per unit of service, volume of services, and changes to the mix of services, is a reasonably adequate methodology – for insurance. But medical insurance is not medical practice. It seems to me that the insurance methodology is inadequate to explain, in fact an obstacle to understanding, medical delivery costs.
Thank you. I agree that insurance is problematic. Nevertheless, there is no shortage of analysis of components of medical cost increase (prices, intensity, new goods and services.)
“. . . there is no shortage of analysis of components of medical cost increase (prices, intensity, new goods and services.)”
Yeah, that’s true, but they don’t seem to have helped much.
I wish our politicians and so-called thought leaders who came up with ideas like ACA had instead read studies of why medical practices cost so much to run; or what drives delivery costs within a hospital or other institutional setting.
Because public policy focus insurance instead of medical delivery cost has not helped much, either
Absolutely. That is one reason why we keep trying to explain that increasing the proportion of people with health insurance should not be the primary goal of health reform.