Tuesday, October 8, 2013

When noble intentions and market realities collide

Lots of people have already shared this, but it's too good to pass up.  I apologize for the lengthy excerpt, but in this case you have to hear the voices of the people quoted to get the story:

Cindy Vinson and Tom Waschura are big believers in the Affordable Care Act. They vote independent and are proud to say they helped elect and re-elect President Barack Obama.
Yet, like many other Bay Area residents who pay for their own medical insurance, they were floored last week when they opened their bills: Their policies were being replaced with pricier plans that conform to all the requirements of the new health care law.
Vinson, of San Jose, will pay $1,800 more a year for an individual policy, while Waschura, of Portola Valley, will cough up almost $10,000 more for insurance for his family of four. [...]
Covered California officials note that at least 570,000 of the 1.9 million people who buy their own insurance should be eligible for subsidies that will reduce their premiums.
Even those who don't qualify for the tax subsidies could see their rates drop because Obamacare doesn't allow insurers to charge people more if they have pre-existing conditions such as diabetes and cancer, he said.
People like Marilynn Gray-Raine.

The 64-year-old Danville artist, who survived breast cancer, has purchased health insurance for herself for decades. She watched her Anthem Blue Cross monthly premiums rise from $317 in 2005 to $1,298 in 2013. But she found out last week from the Covered California site that her payments will drop to about $795 a month.

But people with no pre-existing conditions like Vinson, a 60-year-old retired teacher, and Waschura, a 52-year-old self-employed engineer, are making up the difference. [...]
Both Vinson and Waschura have adjusted gross incomes greater than four times the federal poverty level -- the cutoff for a tax credit. And while both said they anticipated their rates would go up, they didn't realize they would rise so much.

"Of course, I want people to have health care," Vinson said. "I just didn't realize I would be the one who was going to pay for it personally." (Emphasis added--E.M.)
Isn't that it, in a nutshell?  Most of us think that the way health care is paid for in America is a mess.  Many of us think that linking health insurance (note: not care) to employment and then making access to care based on insurance is a model that simply no longer works.  Lots of people have been frustrated by the difficulties the self-insured face, difficulties which make self-employment, once a mainstay of American innovation, a risky venture especially for anyone with a family.  And many of us, especially people of faith, worry about the people at the margins, the people who don't qualify for Medicaid but can't buy insurance unless they severely curtail their purchases of things like food, clothing and shelter.

So, to some people, the ACA seemed like a good way to fix these problems--except that the more we learn about the actual legislation as opposed to the sound-bite promises that form the basis of what most people "know" about Obamacare, the more we learn that many of these problems aren't being fixed at all, and others are only being fixed by pricing middle-class Americans out of the healthcare market.  Not many of us, for instance, could afford for our insurance premiums to cost us $10,000 more per year than they do now, but financial analysts who have studied the ACA in detail are warning that while such increases might--for  now--be limited to self-employed people like Tom Waschura, above, there is simply no way to provide the increased coverage the law envisions without eventually raising the health insurance premiums for practically every American, and raising them drastically.

To me, the health care law popularly known as "Obamacare" is a classic example of what happens when noble intentions collide with market realities (see also: Marie Antoinette's comments about cake).  That a nation as large as ours should figure out a more equitable way for people to have access to health care is a good principle.  That the only way to make this happen is to place the lion's share of the cost burden on middle-class families so that they, too, have to start making cuts in their food-clothing-shelter budget in order to pay not only for their own health care but for reduced rates for other people is an unsustainable model, and it is the exact opposite of an equitable system.

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