Obamacare Perspective November 1, 2013 Here are the top lines (as I see them): 1. After 80 years of trying — and against enormous and continuing opposition from the Republican Party — we have finally got health care reform moving . . . and on a model conceived by a Republican think tank and launched with success by a Republican governor who heralded it as a model for the nation (before he started running for his party’s Presidential nomination in 2012, at which point he denounced it). 2. The long-term effect will be to make our citizenry — and our economy — healthier and more secure than they would otherwise have been. 3. There being no free lunch, the above is possible for two main reasons: > First, tens of billions of dollars in extra taxes are being shifted from the most fortunate among us to the less fortunate. (For each extra $1 million in dividends or capital gains you earn next year above your first $250,000 or so in taxable income, you will be hit with an extra $38,000 in tax. That’s a lower tax rate than when Ronald Reagan left office; but repugnant to any millionaire or billionaire who feels he has it too rough or the working poor have it too easy.) > Second, all manner of pilot programs, best practices, and incentives are built into the program that over time should make health care delivery less costly than it otherwise would have been. (Example: insurers may now retain no more than 15% or 20% of premiums to cover their operating expenses and profit. Example: the right kinds of free preventive care can lower costs. Example: hospitals will soon have a financial incentive to see as few surgical readmissions as possible.) 4. Lots of states are enrolling folks just fine — Washington State has already enrolled 49,000 with another 92,000 in process. Watch. Kentucky has already signed up more than 26,000. California reported 95,000 applications in process after just the first two weeks. New York, 174,000 after the first three weeks. Massachusetts, of course, has long since shown this model can work fine. The irony is that most of the states that have left this job to the Feds are controlled by Republicans who claim to want the smallest possible Federal government. But do you know what? Sooner or later, this immensely frustrating start-up will be behind us. Making sensible adjustments as needed along the way, we’ll get there. It would be much easier if one party were not so invested in the system’s failure and all worked together — as they did under Mitt Romney in Massachusetts — to make it a success. It would be easier if wealthy Republicans were not spending a fortune to discourage young people from buying insurance. But we’ll get there. 5. Many of the people who’ve been expecting the worst will come to see Obamacare as a pretty good deal, after all. What fewer will appreciate — but that makes them no less important — are the societal benefits that will affect us all indirectly, as members of a healthier, fairer, more productive, prosperous society. My friend Jonathan is not one who’ll be getting any subsidies. Five weeks ago he wrote, with some agitation: “I’m paying $891 now for a family of six. With an additional $500 monthly Health Savings Account contribution, I can cover 100% of our costs for a total of $1391 per month. Although Access Health Connecticut hasn’t published the rates that will go into effect next week (shame on them), I have dug through the bureaucratic details and figured out my health insurance exchange premium rate would be roughly $1400 for only 60-70% actuarial coverage. I am dubious that my current plan will continue to exist. Nobody’s sent me a letter about my renewal rate on 11/1/2013. The huge flaw in the roll-out is the vacuum of information. If you want to scare people and provide room for fear-mongering, just keep them in the dark. Whenever it’s hard to find the price of something, that’s a tip off.” And yet last night he emailed: “I finally accessed AccessHealthCT.com. The State of Connecticut did a great job. Once I got in, it took about 15 minutes to complete an application for a family of six. Choosing a plan took some time. Once I decided that we should have deductibles similar to our old plan, a PPO, not an HMO, and a broad provider network, I was able to choose the right one. It took a couple hours of research to figure it out. That’s not so bad for a major purchase, and at least the Obamacare plans had consistent disclosures so I could compare them to one another. Our new plan has a bit higher coinsurance than our old one. Since it covers all the preventative stuff that we use every year and we rarely hit the deductible, looking back at the last 10 years as a guide, I think it will save out of pocket costs. The Obamacare insurance costs 11% less than our prior plan. All together I expect to save $2000 – $3000 per year, without any subsidy.“ So quite upset at the imposition of Obamacare only five weeks ago, he now expects to save $25,000 over the next decade, while living in a country whose citizenry and economy will be healthier than they otherwise would have been. 6. Most of the criticisms are misleading. There is the charge that millions of people are losing their policies. But it turns out that carriers routinely canceled policies long before Obamacare, so this is not entirely new. And that many of the policies being dropped are those that failed to meet Obamacare’s minimum benefit standards. And that about half the people who replace these sub-par policies with better ones will be paying less than they were before (though about half will be paying more). So a lot of dust needs to settle; but it’s not quite the nightmare that is being portrayed. And you may have seen the “monkey court” clip, where a Republican congressman charges the law strips us of our medical-records privacy — and a Democratic congressman sets him straight. And we can be sure there will be endless individual horror stories — most of which will prove wildly misleading as well. See examples here. Consumer Reports has posted healthlawhelper.org to try to dispel some of the confusion and to help you find out what you need to do. Have a great weekend.