Single-Payer Extremists: Obamacare Has Increased Health System Overhead
Drs. David Himmelstein and Steffie Woolhander are the Bernie Sanders of health policy. For decades, they have advocated that the U.S. adopt a government monopoly, single payer, health system. They write economically illiterate articles asserting that Medicare is great because it has low administrative costs.
Nevertheless, a stopped clock is right twice a day, and the good doctors’ latest article nails Obamacare for increasing the overhead of U.S. health insurance. Who would have even thought that was possible?
The roughly $6 billion in exchange start-up costs pale in comparison to the ongoing insurance overhead that the ACA has added to our health care system — more than a quarter of a trillion dollars through 2022.
The two Harvard Single-Payer folks are correct that ObamaCare boosts administrative costs. Supposedly, the ban on underwriting would reduce such costs. But the convoluted exchange system (and the medical loss ratio regulations) ensures administrative costs are high. I believe the exchange in Hawaii is costing something like $50,000 per enrollee to run when there are only a handful of insurers.
I’ve always thought the single payer extremists (especially Himmelstein and Woolhandler) have focused on admin exoense, rather than total expense. It’s no surprise they still do so.
And of course, it’s no surprise that they continue to miss the greater point by doing so,
Possibly an unrelated question, but does anyone here know if the subsidies are included in the medical loss ratio? Technically they are not premium dollars – if they are not counted as such then the insurers are laughing all the way to the bank even more than suspected.
Not sure I understand the question. There are a lot of “subsidies” in Obamacare.
the subsidies through the exchange for those 133% to 400% of poverty
The numerator of the MLR is the premium. Which proportion is paid by the beneficiary versus the taxpayers is not relevant to the calculation.
You meant to say denominator, but you are of course correct about the meaning of the term MLR.
Thank you. A slightly embarrassing error. I was standing on my head when I wrote it.