One of my biggest regrets about the Affordable Care Act is that it really does not improve health care. The Affordable Care Act made some changes to the way we pay for health insurance but we are still stuck with the inconvenient truth that health insurance does not heal people. Hospitals, pharmaceutical, and medical device companies do not heal people either. If we distill health care down to its bare essentials, it is the health care professionals who heal people and I remain unconvinced their job got easier or more effective with the Affordable Care Act.  It might seem obvious but if we are going to improve health care and reform the cost structure then it would make sense that we should focus on the health care professional/patient relationship. The Affordable Care Act took a different tack and seems to be inordinately focused on expanding a flawed third party payer system. From this viewpoint we can see that as much the Affordable Care Act was a political success, it has been a health reform failure. When I started working in the 1970s the third party payer system was still a pretty effective to pay for health care. Forty years later it has declined to the point where it is viewed as one of the major problems impeding health care reform and I am once again thinking self-insurance is a feasible plan. Even when the Affordable Care Act supporters reluctantly admit to the third party payer system failures they cling to the belief that expanding the system is a price they are willing to pay if it expands access to health insurance to the poor.  I do not see a good future for health care reform with an expanded third party payer system. To those people who had their health insurance plans canceled and replaced with higher cost plans, the Act has increased their financial burden. They are the designated Affordable Care Act “losers”. To the poor who were not paying for their health care, it is much ado about nothing. It does not matter to them if the emergency room accepts Medicaid. The financial burden of hospital care was never going to be their problem. The only potential winners are the people whose subsidized insurance is less than their current plans. This dependence on subsidized insurance keeps reminding me of the insurance subsidies in the Farm bill. As I was pondering alternatives to the Affordable Care Act subsidized insurance I ran across the TriHealth pricing page and was surprised with the discounts they offer based on family size and income level. The biggest attraction of the Affordable Care Act exchanges was already being offered by a local hospital. Here is the table from their page.

I am left to ponder one final question. If we have an example of a direct financial subsidy system that does not require the Individual or employer mandate, why did we choose the Affordable Care Act option with its inefficient scheme of subsidized insurance?

Yesterday I pointed out an interesting oddity in the Insurance cancellation debate and today I read a more extensive post by Adrianna McIntyre on The Incidental Economist about the Administration’s plan to “help” the people whose health insurance policies are being canceled. Like all policy changes there are winners and losers. Here is my comment.

In a narrow sense some insurance companies may benefit from this ruling. As an example my policy with Aetna in Ohio is grandfathered since I acquired the policy before March 23, 2010. According to Aetna, policy holders who acquired the policy after that date are not grandfathered and are being canceled even though the policy will continue for people like me in 2014. Since Aetna is not participating in the exchange it would make business sense for them to un-cancel those policies acquired after March 23, 2010, which are just like existing grandfathered polices because they could hold on to existing customers.They become the hero. This a much bigger dilemma for companies participating in the exchanges like Anthem since they are going to get a lot more money by pushing their customers into the exchange. Any way you slice it, they become the goat.  Once again we are reminded that no good deed goes unpunished.

Aaron wrote a post, “Anecdotes ain’t our thing. Stop asking.” in which he said it was important to him to “see the system work at a population level”. Okay, that got me thinking. Here is my comment.

I am curious what “see the system work at a population level” will mean? I am also curious when the Affordable Care Act will transform itself from a primarily political achievement into a policy driven achievement. Until then I would be suspicious of any population level data coming from the http://www.healthcare.gov. On one hand I agree with you that a steady diet of anecdotal stories is hazardous to your mental health. On the other hand I found that when I tried to explain differences between anecdotal information and some “population level” data sets found on healthcare.gov and coming from HHS, I found serious problems in either the data or the application used to access that data. As long as http://www.healthcare.gov is a politics driven web site it would be wise to remember the old saying, caveat emptor!

1. As an example the insurance finder on healthcare.gov is an example of a population level data application that is seriously misleading for some people. Was it intentional or another silly healthcare.gov mistake?
2. For the last month the Kaiser subsidy estimator was incorrect for me. It looks like the source of their problem was bad data from healthcare.gov(GIGO).
3. I am still trying to figure out the burst of reports in September 2013 that showed that the 2014 Ohio rates will show a reduction compared to 2013 when all of my simple price checks are showing a 100% increase in rates? Maybe it is a coincidence but something has got to give. It is way past time that policy statements should start matching up with price checks.

While listening to Ezekiel Emanuel defend the Affordable Care Act on Fox News Sunday I reminded myself that I should do a better job of being prepared for the inevitable cancelation of my grandfathered health insurance plan. Although I have toyed with the idea of going without health insurance I believe my best choice is to replace my current plan with the health insurance plan that has the lowest monthly cost after the subsidy. I currently use this catastrophic care strategy very effectively and all of my routine out of pocket medical costs are paid for directly from the HRA. In my case I had a pretty nice low cost, comprehensive plan, AARP-Aetna(3000/5000/20%). So what would I get with the lowest cost plan offered by the exchange?

The lowest cost bronze plan is the HealthSpanOne 6000 HSA. Here are the details from www.healthspan.org website. Like most exchange plans the deductible is pretty high, $6000/$12000. The 0% coinsurance is nice but like many exchange plans, it has its limitations. The biggest limitations for me is that it does not cover any out of network costs and I could not find my preferred hospital and family doctor on the provider list.

The next lowest cost bronze plan from a different insurance company is the Anthem Bronze DirectAccess ”“ cabu. It has a $5000/$6350 deductible and 30% coinsurance but it is has a higher monthly cost, deductible, and coinsurance than my unsubsidized insurance.

Once again I am reminded that my current plan is a much better deal than the new “improved” plans offered through the exchanges. The exchanges do not have much of a choice and after looking in detail at few of the plans, I can say that their only saving grace is that they are subsidized. They are not bad but they definitely fall short of what I was accustomed to in several areas. I guess Ezekiel and I have different ideas of what constitutes a good health insurance value.

I wasn’t going to blog about health care today but Ross Douthat wrote about one of my Affordable Care Act pet peeves, Obamacare’s Losers and Why They Matter. In the dogged pursuit of expanding access to health care, the Affordable Care Act supporters have to admit that the status quo has become more entrenched. The key to this problem is that subsidized health insurance is becoming even more entrenched and difficult to reform. When the federal government subsidizes health insurance in every market it looks like one massive shell game in which there will be one arbitrary group of winners and another arbitrary group of losers and common sense is no longer a valid argument.

If we want health inflation to stay low and health care costs to be less of an anchor on advancement, we should want more Americans making $50,000 or $60,000 or $70,000 to spend less upfront on health insurance, rather than using regulatory pressure to induce them to spend more. And seen in that light, the potential problem with Obamacare’s regulation-driven “rate shock” isn’t that it doesn’t let everyone keep their pre-existing plans. It’s that it cancels plans, and raises rates, for people who were doing their part to keep all of our costs low.