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Happy Birthday, Obamacare (Part Deux!)

March 24, 2012

By Avik Roy

Obamacare was signed into law on March 23, 2010. This week, the White House organized activists in an effort to tout the law’s alleged benefits: seniors on Monday, women on Tuesday, young adults and kids on Wednesday, health costs on Thursday, and pre-existing conditions on Friday. So let’s go through and discuss what the law actually does in these areas.

Seniors: Lower doctors’ fees mean worse access

Under the Affordable Care Act, Medicare reimbursements to doctors and hospitals are slated to drop below those of Medicaid. I’ve written extensively about how these low Medicaid payments mean that Medicaid beneficiaries can’t get access to needed care. The same thing will happen to retirees, soon enough, unless things change.

The law’s infamous rationing board, the Independent Payment Advisory Board, can’t actually ration care in the conventional sense, by denying certain treatments to seniors because they aren’t cost-effective. Instead, the Board will ration time, by underpaying doctors and hospitals, and thereby forcing seniors to wait for weeks and months to gain needed care.

Medicare spending needs to come down: but it can come down through improved efficiency, by giving seniors more control over their health dollars, as the Wyden-Ryan plan does.

Women: Costlier insurance, lower income, less subsidies

Women are disproportionately affected by recent revelations that employers are only required under the law to provide insurance to their workers, and not to those workers’ dependents. Because the law will drive up the cost of health insurance (see below), women, who are more likely to work at home and/or have lower incomes, are most affected by the law’s costs.

Young adults: Bearing the brunt of the law’s cost increases

It’s young adults who are the biggest losers in the post-Obamacare world. Thanks to community rating, they will be forced to pay more for health insurance so that the middle-aged can pay less. This makes no sense, as it will encourage younger people to go without insurance, making insurance that much more costly for everyone else, and increasing economic insecurity for the very people who are just starting out in the economy.

Kids: Shoved into the Medicaid ghetto

Four in ten children in America spend some of their childhood on Medicaid or its cousin, CHIP, the worst-run health programs in America. Obamacare massively expands Medicaid, driving up the number of children who will be enrolled in these programs.

Study after study shows that Medicaid has poor health outcomes, and that expanding the program will make it even more difficult for children to gain access to needed care.

Health costs: Premiums will go up

Earlier this week, I discussed how Jonathan Gruber, who once stated that the law would “for sure” reduce insurance premiums in the individual market, is now stating that the law will increase those costs. For a review of why the law will increase premiums, read through this detailed post.

Pre-existing conditions: A complete mess

The law’s high-risk pools were designed to serve as a bridge until 2014, when the law bans insurers from not taking people on because they are already sick. Unfortunately, those pools were badly designed and underfunded, leading per-capita high-risk pool spending to double, relative to what states had been projecting.

In addition, if the Supreme Court overturns the individual mandate in June, it is likely to also overturn the requirement that insurers take on all comers, regardless of pre-existing conditions. We’ll get more clues as to the Supreme Court’s thinking on this matter on Wednesday, when it hears arguments as to the severability of the mandate from the rest of the law.

There is a much better way to address the problem of pre-existing conditions: restore an individual market for insurance, in which people can choose policies for themselves, instead of having them chosen by their employers or the government.

Will Obamacare enjoy a third birthday?

Republicans are certain to repeal the law next winter, if they manage to win the White House and a majority in the Senate. That outcome, of course, is far from assured. Either way, we will all be thinking about American health-care policy very differently come March of 2013.

Original Source: http://www.forbes.com/sites/aroy/2012/03/24/happy-birthday-obamacare-part-deux/

 

 
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