Friday, September 02, 2016

EDITORIAL >> Let’s insure all Americans

Another cascade of headlines last week, mostly on the predictable pages, foreshadowed the doom of Obamacare—the Patient Protection and Affordable Care Act—when a new president and Congress assemble in four and a half months.

Three of the insurance giants, Aetna, Humana and United Healthcare, announced that they probably would stop offering plans in Obamacare’s exchanges for many counties across the country after this year because they are losing money, which will reduce the competition in those exchanges. In order to get bigger and more profitable by saving $3.5 billion in duplicated costs, Aetna is trying to buy Humana, but President Obama’s Justice Department has been resisting it as anticompetitive merger that violates antitrust laws. We are sure that had nothing to do with Aetna’s threatened pullout from the president’s signature program.

So this must be the final blow for Obamacare, as the Arkansas Democrat Gazette predicted Thursday in the latest of scores of editorials condemning the 2010 healthcare law, this one labeled, “Kill the monster.”

Almost simultaneously, the paper carried front-page stories about the phenomenal success of Obamacare’s biggest feature, Medicaid expansion. More than 325,000 low-income working Arkansas families are now enrolled in Obamacare and are getting medical attention that they formerly could only get with the charity of the overflowing emergency rooms of big hospitals. But Republican lawmakers, opponents of Obamacare, saw that as the forerunner of ruin. When the state must start paying a small fraction of the premiums for medical insurance for those people, the legislators said, it will just about bankrupt the state treasury.

No one dared to speak up at the legislative meeting where the mourning occurred to remind the legislators that their own conservative business consultants, whom they paid handsomely, had given them hard figures showing that the more p eople signed up, the better off the state would be. And not just the poor policyholders but also the state treasury and the taxpayers. Owing to the vast infusion of federal dollars into the state, their cumulative fiscal impact and the collection of state insurance premium taxes for all those policies, the state treasury will be flusher for many years than it would be if Obamacare had never become law. Rep. Joe Farrer (R-Austin), a former critic, now says Medicaid expansion is working fine in Arkansas.

But the pullout of three big insurers in many U.S. counties is a big, big concern, and has been since the law’s implementation three years ago. Too many very sick people and too few young healthy people have bought policies on the exchanges. About 20 million Americans who weren’t insured in 2010 when the law passed are now insured, but almost that many more have so far chosen not to be covered, primarily because good health policies are still expensive even when the government offers assistance for families whose earnings are below 400 percent of the federal poverty line.

The truth is that Obamacare is not going away, whoever is elected president. Donald Trump says he would ask Congress to repeal Obamacare immediately, but he also says he will replace it with something that would cover every single American. What that would be —Medicare for all or something else—he has never said, but you can be sure that it would be far costlier to the taxpayers than Obamacare or else a giant addition to the national debt.

The insurance industry warned about the shortcomings in the new law when it was enacted. It said the taxes on those who remained uninsured were way too low to encourage young and healthy people to buy plans, that the diminishing subsidies for people based on their incomes were still too low to persuade low-income families to enroll, and that it should tackle the exorbitant costs of many drugs, which were driving up the insurers’ costs for chronically sick people.

Originally, the problem was that, owing to the death of Sen. Edward M. Kennedy, whose vote enabled the Senate to block a filibuster, Congress had to enact the weaker Senate version rather than the better researched and written version by the House of Representatives. The House had better subsidies for lower incomes, simple subsidies rather than the complicated tax credits of the Senate bill, more realistic penalties, and provision for a government-run plan that would compete with commercial insurers.

Ordinarily, big programs like health insurance require almost annual tinkering. Social Security had to be amended almost yearly to work out the kinks and omissions and still needs it. Congress amends Medicare and its funding mechanisms regularly, no matter which party is in control.

The last two insurance reforms before Obamacare, the introduction of Medicare Advantage plans in the 1990s and the Medicare drug program in 2004 were on a death spiral like opponents say Obamacare is on, but Congress came back—under Republican leadership no less—and added federal expenditures to make the plans workable and extremely profitable for the insurers.

But partisanship had become so fierce by Obama’s election that no amending has been possible. The House of Representatives has voted many times to repeal Obamacare but will not permit even a comma change to the act.

One hopes that may change in 2017, though who would bet on it? Hillary Clinton laid out a comprehensive set of changes to the law that she would try to enact—changes in the schedule of premium subsidies, perhaps more strenuous penalties, and a public option to compete with Blue Cross and the others to hold the premiums down.

Congress could do what both it and the president opted not do in 2010, which was to place some mandates on the pharmaceuticals’ profiteering on life-saving drugs, like the $94,500 a year that the company holding the patent for vital hepatitis C medicine charges a family. An insurer with many such patients is going to see its profits go down. Big insurance companies need to tend to their exorbitant salaries and administrative costs, like the insurance startup Oscar, which thrives on the exchange.

Even a President Trump will not cancel insurance for 20 million Americans, after saying he would guarantee it for everyone. The name Obamacare may disappear, which would be merciful, but no one should be either hopeful or scared that the great progress of that act of Congress will disappear. — Ernie Dumas