Changing plans

Found this in my inbox this week:

UC has changed the menu of the health care plans
that will be offered in 2014. Most notably, the three currently available PPO
plans (Anthem Blue Cross PPO, Anthem Plus, and Anthem Lumenos) are being
discontinued. They are replaced by Blue Shield Health Savings Plan and UC

The Washington Post provided this report of the speech the President gave on Wednesday in Boston, where I’m currently on leave from UC San Diego:

if people receive notification from their insurer that their plan is being canceled, “just shop around in the new marketplace,” Obama said. “That’s what it’s for.” He said people were likely to find better insurance plans for the same price or less.

But then, this is the same man who said this:

92 thoughts on “Changing plans

  1. jonathan

    In the past 5 years, our group plan has been changed 3 times, shifting insurer each time.
    Are you saying Obama is responsible for that?
    Are you saying Obama should somehow have prevented what insurers do?
    Or are you just making noise?

  2. 2slugbaits

    JDH Did the government change your menu of plans, or was it your employer? Employers routinely changed insurance plans offered to employees long before Obamacare was ever dreamt of. In fact, the growing problem of employer sponsored junk insurance was a major argument in favor the ACA. If the three Anthem PPO plans were discontinued because they were not ACA compliant, then it would be fair to blame (but probably even more fair to praise) Obama. If the three Anthem PPO plans were ACA compliant, then their discontinuance was solely your employer’s decision, which ought to serve as a useful reminder for Obamacare opponents who still believe in the fairy tale that they actually exercised any meaningful control over what health insurance plans they purchased.

  3. Duracomm

    Contrary to the supporters current talking points Obamacare is going to force people to pay more money for worse coverage.
    Mr. President: I like My Health Insurance and I Would Really Like to Keep It––Can You Help Me Out Here?

    How many times have I talked on this Blog about rate shock, the millions of people who would be getting cancellation letters from their current health plan, and the problem of people having to put up with more narrow networks?

    And, how many times have those predictions been met by push back and spin: Today’s policies are just junk and people will be better off finding lower cost health insurance under Obamacare.

    Right now I have “Cadillac” health insurance. I can access every provider in the national Blue Cross network––about every doc and hospital in America––without a referral and without higher deductibles and co-pays.

    the best( obamacare plan edit) I can get in a Blue Cross network plan are HMOs or HMO/Point-of-Service plans.

    In the core network those plans offer, I would have to go to fewer providers than I can go to now in the MD/DC/VA market. And, the core network has no providers beyond my area. I can go to the broader Blues network but only if I pay another big deductible for out-of-network coverage.

    The new plan would have a deductible $500 higher than the one I now have and a lot more if I go “out-of-network” inside the rest of the Blue Cross national network.

    And, wait all you people telling me rate shock does not exist, the new far more restricted plan costs 66% more than our current monthly premium. Mr. Rate Shock got rate shocked––and benefit shocked to boot.

  4. cahuenga

    Obama speaks for the government, period. He cannot be held responsible for what private interests do now or in the future.

  5. EMichael

    To Duracomm.
    “Bob Laszewski has been named a “Top 5 Speaker” on health care in a survey involving 13,000 business leaders, educators, association members, and others.”
    Somehow I am not surprised that Mr Laszewki may well be getting screwed here. But I am wondering, after reading his former plan and cost assessments he provided, exactly how many people were actually in his plan?
    Cause it appears that as an “insider” in the industry, he has a real good deal there. Further, it seems he has managed to get a one year extension on his current policy despite its cancellation. And that is something I have not heard anyone else getting.
    More than a little curious to me.

  6. Tom

    I’m generally in favor of ACA, but let’s call a spade a spade and admit that Obama is obsessed with PR and not averse to deceit.
    The best one can possibly say for the Obama statement Jim has pointed to is that he was making a promise he didn’t try at all to keep, or feel at all obliged to update the public when he began planning to break it.
    Look for example at Table 17, footnote 3 of his administration’s projections for health care expenditures, produced more than a year ago:
    “³Through 2013, other private health insurance includes those with Medicare supplemental coverage and individually-purchased plans; after 2013, other private health insurance includes only those with Medicare supplemental coverage.”
    In other words, the administration expected to completely eradicate individually purchased plans outside the exchanges. That’s 24 million individually purchased plans the administration expected would be replaced with exchange plans, according to the table.
    Jim’s story is different: he has employer-sponsored insurance, but his employer lets him choose from multiple plan options. ACA has apparently resulted in big changes in those options. Whether the new options are better or worse than the old is in the details of the plans and Jim’s family’s health story.

  7. Jeremy

    I think this blog would do better to stick to facts. I suspect the reality is that health care is suffering due in large part to rising costs and an aging baby boomer population. This has nothing to do with what Obamacare it is just economics of more people needing medical care and rising costs.
    One area that could help reduce cost would be to limit legal liability for hospitals and Doctors.
    A country that graduates 41 lawyers for every engineer has a real problem! Lawyers are essential just like bankers but they both provide a service to an economy for their fees. The economy must be big enough and profitable enough to support all these lawyers. If there are relatively less and less people making things of value (useful products, energy and technologies) and more people providing services then it would seem that there is a structural problem with the economy. Either the minority of producers of added value must continue to become relatively more productive (like farming has been revolutionized by the petroleum industry) or the economy will become inefficient and/or many lawyers are going to find that society can no longer support them.
    Perhaps this is one of the reasons lawyers and bankers are so prevalent in politics – only by control of the economy can they continue to extract a disproportionate amount of value out of the system?

  8. robert hurley

    I would be all for limiting liability if it would reduce costs and not punish those who have a legitimate legal case. However, I would like to see the estimate of savings. From what I understand of Texas which has limited liability, no savings has resulted. I would be interested in seeing some studies.

  9. Jeffrey J. Brown

    Of course, employer paid health insurance is relic of World War II wage and price controls. In contrast, the Swiss health care system, which requires Swiss citizens to have health insurance, and which tightly regulates what insurance companies have to cover and what they can charge for basic plans, is focused on the individual market, with subsidies for lower income citizens.
    I have previously opined that whatever decision that the Swiss make regarding policy issue tends to be the most rational approach.
    Two articles on the Swiss system:
    Why Switzerland Has the World’s Best Health Care System (4/2011):
    Switzerland Has Its Own Kind of Obamacare — and Loves It

    The country requires everyone to purchase private health insurance, a system that seems to work efficiently while keeping costs under control.
    Depending on the deductible, the monthly premium for this basic package averages about $300 for adults, plus some co-pays, but it can’t exceed 8% of personal income; if it does, the government subsidizes the cost. (For comparison sake, the Kaiser Family Foundation reports that in 2011, employer-sponsored health insurance in the U.S. was $5,429 for what it designates as “single coverage” and $15,9073 for “family coverage.”) Currently, roughly one-third of Swiss households — mainly single-parent families and immigrants — get some form of subsidy. Patients can choose any physician and there’s no wait to see specialists or have surgery. Insurers can’t turn anyone down or delay coverage due to age, medical history, or health risks. They are also not allowed to profit from the obligatory insurance but can make money on the optional supplemental coverage that includes alternative medicine and private hospital rooms.
    So far, the system is running as smoothly as a Swiss watch and the patient satisfaction rate is high. In a 2010 Deloitte survey, more than half of Swiss respondents praised their healthcare system, compared to 21% to 43% of Americans, Britons and Canadians. In fact, grumbling about having to buy insurance is non-existent in Switzerland. At least part of the compliance may be cultural: the Swiss are extremely risk-averse and want to be insured if an illness or another calamity strikes. Today, 99% of the population is insured and when it comes to residents who aren’t — mostly new immigrants — the government can buy a health plan on their behalf and send them the bill.

  10. Jeffrey J. Brown

    NICHOLAS D. KRISTOF: This Is Why We Need Obamacare:
    THE biggest health care crisis in America right now is not the inexcusably messy rollout of Obamacare.
    No, far more serious is the kind of catastrophe facing people like Richard Streeter, 47, a truck driver and recreational vehicle repairman in Eugene, Ore. His problem isn’t Obamacare, but a tumor in his colon that may kill him because Obamacare didn’t come quite soon enough. Streeter had health insurance for decades, but beginning in 2008 his employer no longer offered it as an option. He says he tried to buy individual health insurance but, as a lifelong smoker in his late 40s, couldn’t find anything affordable — so he took a terrible chance and did without. At the beginning of this year, Streeter began to notice blood in his bowel movements and discomfort in his rectum. Because he didn’t have health insurance, he put off going to the doctor and reassured himself it was just irritation from sitting too many hours. . . .
    By September, Streeter couldn’t stand the pain any longer. He went to another doctor, who suggested a colonoscopy. The cheapest provider he could find was Dr. J. Scott Gibson, a softhearted gastroenterologist who told him that if he didn’t have insurance he would do it for $300 down and $300 more whenever he had the money. Streeter made the 100-mile drive to Dr. Gibson’s office in McMinnville, Ore. — and received devastating news. Dr. Gibson had found advanced colon cancer.
    “It was heartbreaking to see the pain on his face,” Dr. Gibson told me. “It got me very angry with people who insist that Obamacare is a train wreck, when the real train wreck is what people are experiencing every day because they can’t afford care.” Dr. Gibson says that Streeter is the second patient he has had this year who put off getting medical attention because of lack of health insurance and now has advanced colon cancer.

  11. Bruce

    Should perfectly healthy people pay prohibitive costs for medical insurance and services for a system that spends 50-65% on the sickest 5-10%, who are largely victims of their lifestyle choices, including smoking, unhealthy diet and habits, lack of exercise, and those aging with the resulting chronic conditions?
    Should healthy men with no children or grown children pay onerous premia that subsidize maternity care?
    Where are the low-cost insurance plans that reward people of all ages for healthy lifestyles, vitals, blood work, active prevention, etc., and who rarely avail themselves of medical services because they don’t need to? Why are they paying extortionist costs for services they don’t consume?
    50-65% of US health care (HC), i.e., “disease care”, spending is on the sickest 5-10% (see above). Only 3-7% is spent on the healthiest 50-80% (!!!).
    Public and private HC spending is an equivalent of 18% (!!!) of GDP.
    HC spending is an equivalent of 41% (!!!) of private and public wages (before taxes).
    HC spending is an equivalent of 25% (!!!) of US disposable personal income.
    Public HC spending is an equivalent of 20% of total gov’t spending and 27% (!!!) of receipts.
    HC spending has risen 10 times faster (!!!) than the wages and salaries of the bottom 90% over the past 40-45 years.
    HC in the US is hyper-financialized via the private insurance industry. Effectively, no HC services are provisioned until insurers are paid first and profit.
    Combined total local, state, and federal gov’t spending (including elder transfers), private HC, and household debt service is an equivalent of 50% (!!!) of GDP.
    Debt, HC spending, and gov’t to GDP no longer permits the growth of real GDP per capita. Add the net energy costs per capita from the US still importing half of oil consumption, and the US private sector is in contraction from onerous costs of HC, gov’t, debt service, and net energy per capita.
    The ACA (written by insurers, AMA, hospital companies, etc.) institutionalizes the hyper-financialization of HC and gov’t-sponsored and -mandated, cartel-like insurer revenues and profits.
    NO ONE but the top 1% can ACTUALLY afford medical services in the US.
    The situation is unspeakably appalling and utterly unsustainable. Debt service and HC costs are bankrupting households, small businesses, and gov’ts.
    We desperately need a redesign of the economic and financial operating system and a hard reboot the system; otherwise, collapse is the high-probability outcome.

  12. Duracomm

    Jeffrey Brown,

    Obmacare is likely to make the problem your article talks about worse.
    Existing policies are going to be cancelled and the obamacare system that is supposed to let people replace their cancelled policies is not working.

    In other words Obamacare took health insurance away from people and made it difficult if not impossible for them to replace the policy that was taken away from them.

    It is completely possible that there will be more people without insurance after obamacare is implemented then there were before.

  13. 2slugbaits

    It’s sad how choked up a lot of conservatives get when the government forces people to get better, real insurance; but somehow they don’t seem to mind when the government makes subscribers pay for worse insurance. And for those of us who work for the federal government, that’s exactly what St. Ronnie did. My wife was a couple of months pregnant when she started feeling sick at work. It got worse as the day went on. Then it got a lot worse. Since we thought we had good insurance she went to the emergency room at a nearby university hospital. The fetus had died and they had to use a procedure that was medically identical to an abortion. Reagan had changed federal insurance plans so that our BC/BS did not cover the procedure even though the fetus was already dead. The doctors at the university hospital told her that she was within an hour of dying by the time she got there. If she had known that our federal BC/BS policy did not cover the “abortion” it’s quite likely that she would have stayed away from the emergency room. This is just one real world case in which political conservatives had no qualms about unilaterally taking away health insurance coverage. So conservatives seem to be fine with the government making policies worse, but they wave the bloody shirt when the government makes policies better by insisting upon minimum standards.

  14. Bruce

    I neglected to add to the list above two additional staggering facts about US health care (HC) spending:
    US public and private HC spending is an equivalent of $9,200 per capita and $24,000 (!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!) per per household vs. the average $45,000 household income for the bottom 80-90%.
    Jeffrey, compared to the US, Switzerland is a much more racially/ethnically/culturally homogeneous, egalitarian, non-militarist society with a U rate of 40% of that of the US, a poverty rate of about half, a Gini coefficient 35-40% lower, and military spending to GDP of 20% of that of the US. No comparison. Thus, it should be no surprise why they as a society can afford their HC system.
    The US (successor to the British Empire) is more like imperial Rome than Switzerland or other modern advanced economies/societies. The Swiss, Germans, Dutch, Belgians, Danes, Swedes, Fins, and Norwegians would be appalled that a fellow citizen could go bankrupt and be homeless because he or she became ill for whatever reasons beyond his or her control.
    Similarly, they would be shocked and outraged were their HC system to cost an equivalent of half the average household income of their working-class population.

  15. mwilbert

    It is completely possible that there will be more people without insurance after obamacare is implemented then there were before.”

    Not really. First, they will fix the problems with the website eventually. Second, there are other ways to sign up. Third, don’t forget the Medicaid expansion.

  16. Jeffrey J. Brown

    Re: Duracomm
    As noted above, the Swiss system–which has an individual mandate, along with subsidies for lower income Swiss citizens, with tight controls on what insurance companies have to cover and what they can charge for basic polices–has achieved a health insurance coverage rate of 99% of the population.
    And an excerpt from the above Forbes article:

    The performance of Switzerland is even more impressive when you consider how fiscally stable it is. The Swiss system, called Santésuisse, is striking in its differences to ours. Government spending on health care in Switzerland is only 2.7 percent of GDP, by far the lowest in the developed world. By contrast, in 2008, U.S. government spending on health care was 7.4 percent of GDP. If the U.S. could move its state health spending to Swiss levels, it would save more than $700 billion a year.

  17. Duracomm

    Two problem with the frequently repeated talking point that obamacare is forcing people off bad policies and onto good ones.

    1. Obama said if people liked their insurance and doctor they could keep them. That turned out to be a lie. Without that lie it is unlikely the obamacare would have become law.

    2. Obamacare is forcing some people to buy policies with higher premiums, higher deductibles, and worse coverage. In other words it is forcing people off good policies and onto bad ones.

  18. Duracomm

    mwilbert said
    “First, they will fix the problems with the website eventually”

    The problem with that thought is that government IT projects have a long history of failure. For example, the IRS has a history of substantial IT project failures. The past failures of IRS IT projects is especially significant because the IRS has a central role in the implementation of obamacare.

    Federal IT Project Failures: Proposed Legislation Aims to Stop the Insanity

    The U.S. Government has a sordid history of IT project failures. There’s the FBI’s virtual case file system, which the agency scrapped in 2005 after sinking $170 million into it; the $8 billion systems modernization the IRS launched nearly 10 years ago; and the U.S. Citizenship and Immigration Services’ $190 million automation effort, to name just a few standouts.

  19. Perry N. Thrust

    Professor Hamilton makes a very good point.
    People are rightly outraged by the cavalierly false promise the President made that “if you like your insurance you can keep it.” However, it’s not been much noticed that he is continuing to make these cavalierly false statements. It’s just manifestly untrue that if you have had an insurance policy you liked cancelled that you will be able to shop on the exchange for a better plan that costs less.
    One of the selling points of Obamacare was that it would produce more choice for people. Another was that it would lower the cost of health care, which the Administration has already been taking credit for. However, if you look at what’s available on the exchanges, you can see that both claims are untrue.
    In the UC system, the Anthem Blue Cross PPOs were dropped because they apparently experienced double digit cost increases. They were replaced with 2 Blue Shield of Ca plans, the Blue Shield Health Savings plan, a high deductible PPO, and the UC Care plan, a hybrid PPO. The UC Care plan is the only PPO that is similar to the PPOs that were dropped. If you use UC doctors, then you have no deductible and low co-payments. But you can also access the Blue Shield Preferred Provider Network with around 20% co-pays or go out of network at a 50% co-pay. The 2013 Anthem plan used the Anthem network with a 20% co-pay for in network and 40% out of network. The 2013 Anthem plan was 679.37 per month employee contribution plus 1249.04 employer contribution, or a total of 1928 per month. The UC Care plan is supposed to be similarly priced.
    What can you get on the exchange? If you go to Covered California, and look at the Gold plans (which are most similar in coverage to the Anthem PPO) you can see that Anthem only offers an HMO. If you want a PPO, you can get the Blue Shield of CA Gold 80 PPO for 1443 per month.
    So, it looks like you can get a Blue Shield PPO for 1443 per month on the exchange while UC Care is 1928 per month. That looks cheaper–is the President right? With this Administration as well as with Obamacare insurance, you have to look at the fine print. If you go to the Blue Shield of Ca website, you can see what doctors and hospitals are available in UC Care vs. the Gold PPO. As an example, you can go to U of CA San Diego Medical Center in UC Care. But that hospital is not available in the Gold PPO from the exchange.
    Thus, you can’t buy a comparable Anthem PPO on the exchange. You can get a Blue Shield of CA PPO, but you will not have the same choices of doctors and hospitals as you get from UC Care.
    More choices at lower cost? Nope, Mr. President.

  20. Joseph

    Ah, yes. Sean Hannity says jump and JDH says “How high?”
    JDH accuses the President of lying, implying that he is responsible for the changes in his health plan. Apparently he is unaware that his employer is permitted by law to keep his existing plan if the plan was established before March 2010.
    If his employer has chosen to change his plan, he should be blaming his employer, not the President. The President or the ACA does not have the authority to order employers to keep their grandfathered plans. That is entirely at the discretion of the employer.
    So we can charitably say that JDH is misinformed and is thereby misinforming his readers. To call JDH a liar would be to sink to his level.

  21. Tom

    Jeffrey is right that the Swiss system works well. But to be fair, it’s not cheap. If they weren’t suppressing the franc it would be the most expensive in Europe. As it stand it’s close, and close to the US in spend per capita, but for near universal coverage. The US has to go some kind of European with its health care, there is no other way we’re going to remain competitive in the long run. Most of the developed world is getting universal coverage for c. 11% of GDP. We are at close to 18 and will probably hit 22 before we reach 90% coverage. It’s not rocket science, it’s not something that’s never been done. So figure it out already. Sink or swim.

  22. Perry N. Thrust

    Of course, the President is right too that it may be possible to get insurance at a lower cost by accessing the exchange, but not in the way he thinks. Obamacare is filled with hidden incentives and unintended consequences.
    For Professor Hamilton’s case and many others like him, the President does not seem to understand that the exchange is not available to them under ACA, since the employer provides insurance. So the idea that you can go shopping is moot for a lot of people.
    However, there is a case when an employee can access the exchange even if the employer provides insurance. If the insurance the employer provides costs more than 9.5% of the employees income, the employee can go to the exchange and receive a subsidy. But then the employer must pay a 3000 fine.
    Let’s look at this particular case. For employees that make less than 50K in the U of CA system, the employee pays 357.80 per month for the Anthem PPO and the University pays 1570.61 per month, in 2013. Since the annual employee portion is 12 X 357.80 = 4,293.60, the employee will qualify to go on the exchange if his income is under 45,196 per year. This creates some really interesting incentives for both the employee and the University.
    What if the University decided to push (or offer the opportunity) the lower income employees to the exchange?
    The University could decide to pay the health expenditure as income. They have 12 X 357.8 + 12 X 1570.61 = 23,141 to play with. Paying the 3000 fine, they have 20,141 to pay out. Let’s assume the University pays out 5,500 and keeps the remainder. After paying a 6% social security tax and a 1.45% medicare tax, the employee sees 5109 in extra pay.
    Now, if the employee makes 40K per year, his new income will be 45,109 per year, just low enough to go on the exchange. With this income, according to covered California, the subsidized cost for a silver blue shield PPO is 256/month or 3,072 per year. After tax (federal, CA state, social security and medicare) the employee will have 3,645 of the original 5,109 in extra pay, enough to buy the insurance with 573 left over.
    And the University will have saved 14,641.
    Obamacare is filled with these kinds of perverse incentives. People will figure all this out. Many people may soon learn just how fraudulent the promise is that “if you like your insurance you can keep your insurance.”

  23. sherparick

    Professor Hamilton, I suggest that you contact your University Administration about why they changed health care plans, since that is an employer decision, not a mandate of the Government under the ACA. This is not saying that the ACA did not create incentives or disincentives to such changes, but it was not the thrust of the ACA, and in fact the ACA was designed to slow the dissolution of employer based health plans that had occurred over the previous 15 years.
    I always took President Obama’s statement to mean that: “if you have employer based health insurance, you will continue to have employer based health insurance under the ACA.” However, it does not mean that such policies remain unchanged.
    I agree that the President should have been more nuanced in his statements and the lack of nuance is coming back to haunt him now. The ACA was primarily designed to address the problem of private insurance market where a person was not getting employer based insurance, community rating, the uninsurability the population with pre-existing conditions, and the decline of employer based insurance during the Oughts as medical inflation exceeded the CPI and wage increases. Employers were dropping employees or moving to more cost sharing plans long before the ACA.
    President Obama is certainly guilty of both overstatement and of promising something that was not ultimately in his power under the ACA: employers decision to continue to offer health insurance to their employees. However, the ACA was designed to at least slow the erosion of that system and to provide individuals cut loose with the opportunity to buy health insurance at reasonable cost. In this ACA is different from the Swiss system it otherwise resembles.

  24. Ricardo

    You know I have supported you on preferring the Swiss plan to the Democrat socialist medicine plan but in truth it is hard to find a worse plan in the entire world (perhaps UK and Canada), but the Swiss do not have the best plan in the world. Have you looked at the plan in Singapore?

  25. Ricardo

    The argument most make to support Obama’s lies is that the private insurance companies change their plans not the government. Apparently these people do not understand the term “under duress.” The government writes laws to force insurance companies to change policies, and at the same time the law states that if the companies change their plans they must cancel the plan and the insured must move to a health care exchange.
    Sure I ran a red light and totaled your car but it was your fault because you were driving.

  26. Jeffrey J. Brown

    I guess I’m a little adrift.
    Since you prefer the SwissCare, which has an individual mandate with subsidies for lower income citizens, over ObamaCare, which has an individual mandate with subsidies for lower income citizens, I was wondering what you find so objectionable about ObamaCare, versus SwissCare?
    If we are going to do away with insurance companies’ ability to refuse to cover people because of preexisting conditions (or in the alternative charge them enormously high premiums), it seems to me that there has to be some way of forcing virtually everyone into the system via an individual mandate, otherwise of course one only buys insurance after one gets sick.
    It seems to me that the common connection between SwissCare, RomneyCare and ObamaCare is an individual mandate.

  27. Rich Berger

    “I always took President Obama’s statement to mean that: “if you have employer based health insurance, you will continue to have employer based health insurance under the ACA.” However, it does not mean that such policies remain unchanged.
    That’s pretty comical – so people figured out that the President was lying and you think that is justification for his lies. Essentially, those in the know saw through his deception, but the real purpose of his lies were to keep the voters in the dark until he was reelected.
    Sorry for your loss, Jim. Suck it up.

  28. dilbert dogbert

    I notice a theme here. Seems I didn’t get the memo from Koch to go to “Obama Lies”. Reminds of Casablanca where the officer is shocked to discover gambling is going on while collecting his winnings.

  29. tj

    We can only hope that none of us end up in this situation. I believe it speaks to the point JDH is trying to make.
    My grievance is not political; all my energies are directed to enjoying life and staying alive, and I have no time for politics. For almost seven years I have fought and survived stage-4 gallbladder cancer, with a five-year survival rate of less than 2% after diagnosis. I am a determined fighter and extremely lucky. But this luck may have just run out: My affordable, lifesaving medical insurance policy has been canceled effective Dec. 31.
    My choice is to get coverage through the government health exchange and lose access to my cancer doctors, or pay much more for insurance outside the exchange (the quotes average 40% to 50% more) for the privilege of starting over with an unfamiliar insurance company and impaired benefits.
    What happened to the president’s promise, “You can keep your health plan”? Or to the promise that “You can keep your doctor”? Thanks to the law, I have been forced to give up a world-class health plan. The exchange would force me to give up a world-class physician.

    Imagine if this were your father, brother, son, even yourself. At the same time Obamacare forces you to lose the healthplan and the doctors that have kept you alive, you have a bunch of clowns claiming you can keep your policy and your doctor, or as 2slugs claims, you will have better insurance after you get an Obamacare policy.

  30. baffling

    Prof. Hamilton, as quoted in your blog:
    “UC has changed the menu of the health care plans that will be offered in 2014.”
    it is very disingenuous to imply this was obama’s fault. this is University of California decision. i thought you would be above this behavior. it is the same as folks who have blamed their rising premiums the past 6 years on obamacare. not true. this is a real business making cost savings-perhaps at the employees expense. talk to your chancellor, but be honest on where the blame falls.
    remember, you are not directly buying your health insurance-it is simply a benefit of your employment. you want choice, then choose to not receive that benefit and go onto the exchanges for yourself. you just won’t get your employer subsidy.

  31. baffling

    ricardo, is there any true consumer choice in an employer based health insurance world? you only choose from options your employer deems appropriate, as decided by human resources. should you or human resources be choosing the appropriate plan?

  32. Simon van Norden

    So Jim, how do your coverage options in the marketplace compare to those of your employer?
    1) Have the medical insurance choices available to you personally gotten worse?
    2) Have the medical insurance choices available to your co-workers as a whole gotten worse?
    3) Have the medical insurance choices available to Americans gotten worse?
    Naively, I would think that unbundling health insurance from employment would be a Good Thing, for many of the same reasons that we think unbundling pensions from employment is a Good Thing.
    Of course, as a non-American, I haven’t really followed this insurance kerfuffle you’re having.

  33. AS

    I wonder if instead of squabbling and offering anecdotal comments about a past president’s health insurance changes or the current president’s program if it could be helpful for the economic minds that contribute to this blog to consider how to infuse the market system as much as possible to control health care costs. Assuming that a personal mandate survives, would the inclusion of medical IRAs as part of the mandate choices help to control health care costs by making shoppers out of millions of insurance buyers and health service buyers? What percent of cost conscious health service buyers are needed to drive prices as low as possible? The medical IRA individual I assume would use his/her IRA for routine health services costs and have a high deductible policy to cover true insurance risks. My assumption is that the IRA patient would shop for the best value in health services for routine care and thus make routine health costs subject to market forces.

  34. The Engineer

    I am struck by how conservative the ACA is in practice.
    It seems to up the ante with regards to high deductible health insurance. $6000 deductible? That’s way more than I ever anticipated. I wonder how that is going to work out for people. It certainly gives people all the incentive in the world to shop around.
    It SEEMS to give employers incentives to dump their employer provided health insurance and force employees onto the exchanges. That would make employees pay for insurance with after tax dollars, another conservative goal. Yes, there will be subsidies, but perhaps that is something that will be ratcheted down over time.
    I can see how, if the exchanges ever work as planned, both Medicare and Medicaid could be transferred over to the exchanges. The government could just subsidize the insurance, just as it will for lower income Americans. Perhaps for the truly poor, the subsidy would be 100% of the premium. Perhaps for the elderly, they would pay the premium for a “Bronze” plan, or whatever.
    If the alternative to the ACA is “Medicare for All”, as a conservative, I think I would rather the ACA be made to work.

  35. baffling

    Health insurance coverage of population from Kaiser
    Employer 49%
    Individual 5%
    Medicaid 16%
    Medicare 13%
    Other Public 1%
    Uninsured 16%
    There are only two categories that will be directly impacted by the ACA-individual buyers (5%) and the uninsured (16%). The other people who have policy changes will most likely find the change is due to employer-employee benefit reductions, not obamacare. The uninsured benefit from the ACA, because now they can have insurance. The individual policies may get changes-but the insurance companies can change the policy regardless of the ACA-they are there for profit making. So what percentage of the 5% in the individual policy category will get a better, equal or worse deal? You want to scrap the program because one half of 5% may need to make changes?

  36. randomworker


    Singapore’s 3M medical cost financing system, comprising Medisave, Medishield and Medifund, has been known for its efficiency. Medisave is a compulsory savings system, while Medishield is a low-cost basic medical insurance scheme. Medifund, an additional safety net, is an endowment fund set up by the government to help those who are unable to pay for their medical expenses.

    Sounds more socialist than Obamacare to me.

  37. randomworker

    Each year my employer either eliminates one health care option for employees, or it increases employee contribution/deductibles/co-payments. This has been going on for a long long time.
    For 2014 we are down to 4 options. Three high-deductible plans and one PPO. The PPO cost is incredibly high – the employee contribution alone is almost $5,000 per year (family coverage).
    The plan we eliminated was the last of the HMO options.
    We are actively pushing all employees into one of two high deductible plans offered by a single insurer. We force people to price shop for things like scans and non emergency procedures. You liked your doctor? You don’t get to keep your doctor from year to year.
    We welcome our public service brothers and sisters to the way things have been going in private industry for decades.

  38. baffling

    randomworker, ricardo cites singapore because he is simply anti-obama. there will never be anything obama can do correctly, because he is infused with hate. obamacare and romneycare are essentially the same thing, but in some folks worldview one is socialist and the other is free market. if obama came up with the cure for cancer, the tea party would filibuster!

  39. 2slugbaits

    Simon van Norden I agree that unbundling health insurance from employment is one small step in the right direction. This is pretty much Micro 101.
    tj Where in the WSJ article does it say that this poor unfortunate guy is losing his health insurance coverage because of the ACA? Where? Nowhere. It says that he is losing his current policy because United Healthcare decided to pull out of the California market. Gee…did it ever occur to him that one reason United Healthcare decided to pull out of the market is because he was costing the company a lot of money??? In other words, United Healthcare appears to have decided to drop him from coverage because he was a bad risk. Why does he think United Healthcare would have been just tickled to continuing covering him? Being dropped by insurance companies is one of the things that Obamacare will eliminate once it is fully implemented. It sounds like you didn’t think all of this through.
    So far every anecdotal story you’ve provided us has failed to show any connection between Obamacare and why a particular person lost his or her coverage. You seem to be living in some alternative reality where insurance companies never dropped people from providing coverage until Obamacare was enacted.
    Now I agree that Obama should have been clearer for the slow learners that watch Fox News. Obama did say that junk plans not meeting minimal ACA requirements would be eliminated. And Obama did say that “Cadillac” plans would fade away. And Obama did say that some policies would be grandfathered. But apparently it was too difficult for Fox News viewers and Tea Party types to connect all of these conditions and realize that if you had a non-compliant junk policy, then Obama’s promise wouldn’t apply. Apparently it was too difficult for Fox News viewers and Tea Party types to realize that if the insurance company dropped your plan for their own business reasons, then the grandfathering promise wouldn’t apply. Apparently it was too difficult for Fox News viewers and Tea Party types to realize that the US government could not order employers to forever retain the same plans. Maybe this is why studies keep finding that watching Fox News makes you stupid.

  40. Johannes

    From a Harvard point of view, this James Hamilton post is political correct. Congratulations. Though, Menzie may not be amused. Or is your left (Menzie) – right (James) cheerleading a deliberate act ?
    BTW: R.I.P. Lou Reed. He, was a great story teller, of truth.

  41. Ricardo

    As I stated in my earlier post on the Swiss plan I do not like the individual mandate requirement of the plan.
    The Swiss plan sets up a basic plan with three categories: Sickness Insurance, Maternity Insurance and Accident Insurance. Insurance companies must make these available to anyone. I have no problem with that provided individuals are given a choice of opting out if they want to. But with this kind of system individuals would foolish to opt out. The like most Europeans the Swiss value equality more than freedom. As an American I value freedom more than equality.
    As long as the insurance companies comply with basic coverage they can compete on price and they are allowed to do so over the entire country not just one canton. There are even web sites that allow individuals to compare insurance rates of different companies.
    Each person insured must pay a portion of the premius cost themselves. Government subsidies are paid directly to the insured rather than the health provider or the insurance company.
    The Swiss plan also does not cap the coverage that individuals can purchase from the insurance companies. This is another way the insurance companies can compete and how they can make a profit.
    Individuals are also allowed deductibles if they wish to lower their premium and pay more of their health care personally.
    Individuals who do not submit claims are given a reduction in their insurance premiums up to 45% over 5 years so there is an incentive for individuals to live health lifestyles.
    The Swiss system also provides for regular referenda where the voters can actually have a voice in what is included in basic plans. The Swiss have consistently voted down a single payer systems and government run systems.
    In the Swiss system it is the individual who chooses and pays directly for an insurance policy and for family health providers.
    Essentially government involvement in the Swiss system is to provide subsidies directly to individuals for insurance they have purchased and the to ensure insurance companies provide coverage for basic care. Beyond that the government is out of the picture and the patient-doctor relationship takes priority.
    As I said I differ with the Swiss mandate, something I believe is totally unnecessary. I also differ with the Swiss system assigning hospitals to the insured. I believe all health providers should compete. That keeps costs low and quality high.
    I hope that helps.

  42. Perry N. Thrust

    A number of commenters have misunderstood the point that Professor Hamilton is making by accusing him of suggesting that Obamacare is responsible for the loss of the PPO plans at U of CA. Of course, that’s not his point at all. Professor Hamilton is point out that the President has recently claimed that people who have had insurance that they like cancelled can shop on the exchange to get better coverage at lower prices. Hamilton is questioning whether that is true or is just another facile false statement akin to “if you like your insurance you can keep it.”
    Why not stop the personal attacks and instead attempt to refute the point Professor Hamilton is actually making? Go to Covered California and find the plan that he can purchase that will replace at a lower cost the Anthem PPO he lost.
    If you look at my first comment above, I went to the trouble to check if the President’s statement is true for this particular case. I looked at the costs and benefits of what was available in 2013 from the Anthem PPO to U of CA employees and what is available for 2014 from Covered California.
    The fact is you can’t go on the exchange to get better coverage at a lower price. You guys need to acknowledge the Administration’s deceit.

  43. benamery21

    JDH: The UCOP on the subject. They eliminated the most expensive plans to address rising healthcare costs. Like the salary banding change back in 04-05, this is driven by cost pressure.
    The UC Academic Senate on the subject. This was not fully collaborative, it’s your employer forcing change.

  44. baffling

    professor hamilton does not buy his insurance from the exchanges. it is a fringe benefit through his employer-purchased and adminstered through his employer. now you can play gotcha if you want-many in the newrags are doing just that-but i and many other folks were never under the illusion that obamacare was promising employer based insurance could not change. it was focusing on the individual market. employer based insurance changes are at the discretion of the boss-not the worker.
    even if you want to go so far as to compare employer based and exchanged based policies, you need to include the significant portion of monthly premium picked up by the employer.
    remember obamacare was always sold as a means to get the uninsured and individual policy holders better protected. preexisting conditions were not really a problem with the employer based policies-that is not what the program was fixing. there was no deceit as you allude to.

  45. Perry N. Thrust

    You are not making a new point. In my first comment, I said:
    “In the UC system, the Anthem Blue Cross PPOs were dropped because they apparently experienced double digit cost increases.”
    You and others persist in attributing to Professor Hamilton a point he has not made. I’m sure he is well aware of the reasons that Anthem was dropped. His point is different: that the President is claiming that people who have had insurance that they liked dropped can go on the exchange and get a better policy at a lower price.
    Simply untrue–that’s his point.

  46. Perry N. Thrust

    No, this is not about playing “gotcha” but rather about making the Administration accountable for its many fraudulent claims.
    Obamacare was not sold as focusing on the individual market. It was supposed to create competition which would “bend the cost curve,” benefiting everyone who has insurance. Remember the promise to reduce the average family’s premium by $2500? In case you’ve forgotten, here’s a reminder.
    Professor Hamilton’s PPO was cancelled because costs have been rising to quickly. That was not supposed to happen. The exchange was supposed to be available to anyone who wanted a better deal at lower prices. That didn’t happen. And if you liked your plan and your doctor, you can keep them. That didn’t happen.
    Like the Administration, you are rapidly backpedalling on the claims that were made. But it’s time to hold the Administration and their allies in Congress accountable.

  47. Perry N. Thrust

    It pains me to see many conservatives, libertarians, and other free market supporters seduced by the idea that the Swiss health system is some kind of private system. No, it’s just another form of socialized medicine masquerading as a private system. We don’t want a system like this in the U.S. Rather, we need genuine free market reforms.
    Here are some myths and realities surrounding the Swiss health care system.
    Myth: The swiss system is a private system with a mandate to participate.
    Reality: Although the swiss system has a very strong mandate, it’s nothing like a true private system. The package of benefits is mandated by the government, eliminating insurance companies’ ability to compete on benefit packages. The swiss system does not have genuine market prices. Instead, all doctors in each canton are paid the same fee for services rendered. These fees are negotiated between doctors’ and insurance groups with heavy regulatory oversight by the government. Doctor’s and hospitals have no price incentive to differentiate by quality. Insurance companies are essentially government utilities, not being allowed to earn a profit from providing the government-mandated insurance. A large percentage of the population is subsidized since no one can pay more than 8% of income for health insurance.
    Myth: swiss citizens can go to any doctor they want.
    Reality: The Swiss can go to any doctor if they purchase the most expensive package–the standard model. However, to keep costs down all insurance companies provide variants that limit choice as follows.
    -HMO model, in which all care controlled by an HMO doctor
    -Family doctor model, in which the family doctor coordinates all care
    -Telemed model, in which participants must first phone the insurance company to get treated
    Myth: Consumers keep health care prices low
    Reality: Health inflation is a big problem in Switzerland with consumers complaining about cost. Swiss health care is among the most costly in the world, with only the US being significantly more expensive. But the primary reason that Swiss health care is less expensive than the US is not competition but rather the thorough price controls instituted at every level by an aggressive regulatory government. Swiss care is 2/3 of the US simply because Swiss doctors make 2/3 as much and drug prices are controlled. Swiss doctors make less since the fees for service are strictly controlled.
    Myth: Competition of insurance companies will keep premiums down
    Reality: There is a substantial variation in prices offered by Swiss insurance companies, even though they are offering exactly the same benefits with all prices for all services identical within cantons. How can this happen?
    1) Insurance companies are not allowed to make a profit selling the mandated package and thus don’t have an incentive to compete on price
    2) A large percentage of the population is subsidized and thus not price sensitive
    3) To the extent that variations in premiums reflect differences in the underlying pools, there is a risk adjustment mechanism in the system that transfers funds between insurance companies to true them up.
    4) Insurance companies do compete on service

  48. Kevin O'Neill

    What was the point of this post? Your employer changed plans – OMG, this never happened before the ACA!!!
    What it shows is the clueless notion that most Americans had much if any choice to begin with – we’re at the mercy of our employers. And those plans have been steadily costing more, covering less, and leaving many deeply in debt *BEFORE* the ACA was ever a glint in Obama’s eye.
    JH should be ashamed of himself for writing this tripe.

  49. Bruce

    Steven, WRT to Achuthan’s recession call, see charts at the links below.
    If the US and world did not enter recession in Q1-Q2, it’s bloody darn close and no better than stall speed.
    The current NBER data looks like 2% annualized for real final sales (real GDP less inventories) for Q3, but real production and wages imply as slow as 0.4% annualized for real final sales.
    Like ’01 before 9/11 and ’08 before Lehman, it appears that the stock market is again a “lagging indicator” for the real economy.

  50. benamery21

    Parry: I saw the part of your previous comment which you have re-iterated for my benefit. I sourced it and provided context. Also, if JDH quotes Obama saying something about cancelled plans, I think it is fair to point out that UC plans were not cancelled, they were dropped by the employer due to increasing costs. In that context it seems somewhat odd to compare 2013 and 2014 plan costs/benefits on level terms. The state of the industry for years has been that everything gets more expensive while coverage decreases. This continuing to be true for a minority of individuals who have been behind that curve is not a surprise or a result of ACA, and does not invalidate the larger story. ACA is not a magic bullet overnight solution of decades of problems in healthcare. Is it making things better on balance, though?
    Thru large group coverage, JDH has always had many of the benefits that the ACA extends to others in small plans, the individual market, and among the uninsured. He has somewhat less to gain directly and immediately. However, to the extent that the ACA (and future reforms) curb poor incentives in healthcare, bend the cost curve, improve American market competitiveness (by lowering business overhead and facilitating labor market flexibility), and improving future fiscal balance, he as a member of the upper middle class has more to gain..

  51. Ricardo

    It appears that the Obama administration estimates of 93 million losing their health care plans, due to the Democrat Socialized Medicine Scheme, were not good estimates. We are not seeing estimates of over 100 million losing their health care plans.
    Professor, sorry you got caught. I still have my work plan with a 43% increase in my out of pocket expense, and the employer mandate has not even kicked in yet. When the employer mandate kicks in, the 2010 Obama administration projections are that about 69% of all employees will lose their plans, but that is only phase 1. The goal of the Democrat Socialized Medicine Plan is a loss of 100% of employer plans. Hopefully I will be retired before the S*** hits the fan at my company.

  52. baffling

    your 43% increase is not due to ACA. it is due to your employer cutting expenses in order to maintain a profit. health care costs have been increasing for the past decade at rates well beyond inflation-not from ACA. your employer does not deem you important enough to keep paying that tab, so they moved the cost on to you. quit blaming the ACA. you are paying more for your insurance because your bosses simply think you will foot more of your medical bills-they deem you expendable. welcome to the free market capitalist system!

  53. Ricardo

    Of course a totally fee-for-service free market health care system would be best. Such a system would, contrary to Progressive myth, allow benevolent organizations to care for those who need help better than the government is doing. My best friend works with autistic and developmentally challenged adults and children. She is constantly finding that care is being reduced under the state system and bureaucracy sucks the life out of health care.
    The point of the discussion of the Swiss system is to demonstrate the gross errors in the Democrat Socialized Medicine Plan. The Swiss system is far superior to the horror we will be facing as the employer and individual mandates hit us full force.
    It is also important to understand that we have not had a free market health system since before the Johnson administration.
    You do have some things wrong in your analysis of the Swiss system but let’s not go there.
    Don’t close your mind and react emotionally. For example, take a look at the Singapore system.

  54. tj

    Where in the WSJ article does it say that this poor unfortunate guy is losing his health insurance coverage because of the ACA?
    No doubt that people get dropped, but note that the person dropped indicated the company had never once raised a question about paying a claim.
    You are in complete denial if you think Obamacare can reshape the entire healthcare industry, rewrite the laws about how insurance companies will be reimbursed and who they can, and cannot cover, yet insurance companies are not supposed to react to any of these changes.
    For you to blame all dropped coverage on the insurance companies and none of it on Obamacare is ridiculous. You are so deep into the loonie- left bin that you can no longer look at the impact of policy changes in a rational manner. All you have left is to make excuses for a national healthcare policy that has major flaws; a national healthcare policy that to lies and deception to pass.

  55. Kevin O'Neill

    Ricardo – what percent of income would Americans have to contribute to charity to cover the uninsured and those in need? Why aren’t they *already* donating enough money to cover the uninsured and those in need? What example in other countries shows that this approach would work?
    Dozens of countries have shown they can deliver healthcare at a lower cost and with better outcomes. Rather than trying to reinvent the wheel we should have just chosen an already existing, working model and implemented it. Unfortunately we are beholden to right-wing ideology. The anti- fact-based bias held by conservatives and libertarians is the hurdle we can’t overcome.

  56. baffling

    tj, you said:
    “For you to blame all dropped coverage on the insurance companies and none of it on Obamacare is ridiculous.”
    is the pot calling the kettle black?

  57. randomworker

    Here’s the thing about a “totally free market health care system.” You wont be able to afford it! So for many care will devolve into basically offering feel better care from quacks and pill pushers but real treatments will be out of the reach of most Americans.
    Hey young fella got 100K for that high risk birth? I thought not. Good luck. Here’s some pills for the little miss if the pain gets too bad. Or you could try Bob Jones Salvation and Healing Miracles down the street.

  58. Additive Analytics

    Agreed, there have been a LOT of problems with the rollout of the Affordable Care Act.
    There is some evidence (not necessarily conclusive yet) that the sickest and poorest are going to the exchanges — whereas the healthy people are going without coverage. If that trend keeps up, it could result in a negative feedback death spiral that kills the system.
    Already I’m hearing a lot of chatter within startup / tech circles about forgoing health insurance and encouraging employees to join their parents’ plans or spouses’ plans. That wasn’t the case 2-4 years ago, at all.
    If the University system is still covering employees (and spouses!) then it’s still better than many.

  59. 2slugbaits

    tj For you to blame all dropped coverage on the insurance companies and none of it on Obamacare is ridiculous.
    I don’t believe I ever said that. In fact, I’ve noted several times that Obamacare was designed to affect junk plans and “Cadillac” plans. This was so obvious that I don’t understand why people seem surprised to learn that their junk plans are being yanked by insurance companies. But the Fox News outlets have been trying to pin every sad story on Obamacare, neglecting to point out that employers and insurance companies have a hell of a lot to say about what plans are available. None of this should have come as news to anyone.
    All you have left is to make excuses for a national healthcare policy that has major flaws; a national healthcare policy that to lies and deception to pass.
    When did I say that Obamacare didn’t have major flaws, even setting aside the website issues? Obamacare is a kludge that was cobbled together in order to satisfy political interests. Hey, it was originally a Republican idea, so it had to be shot through with all kinds of problems. Obamacare retains insurance companies despite very little evidence that private insurance companies add any real value. Obamacare still relies primarily upon employer based coverage, which is inefficient. The case for Obamacare is entirely summed up by pointing out that it’s orders of magnitude better than either what we had before or anything that the Republicans have offered as an alternative.

  60. tj

    is the pot calling the kettle black?
    No, the pot and the kettle agree, you can’t overhaul the U.S. health industry, rewrite reimbursement rules, and not expect major problems.
    By the way and in direct contradiction to 2slugs claim above, the company that dropped the cancer patient, cites Obamacare as the cause.
    Of course, you, 2slugs and the other Obamacare apologists will never be able to admit that Obamacare caused people to lose their perfectly acceptable insurance.
    The flawed policy and the discovery of the lies by Obama and other Dems is only the beginning. Keep in mind that there will be major problems each step of the way, from rollout to record keeping, to bill payment. The technical “glitches” will continue for years, causing much voter anger, and ensure that conservatives end up controlling both houses of congress and the white house.

  61. 2slugbaits

    tj the company that dropped the cancer patient, cites Obamacare as the cause.
    Well, DUH! Of course they would. Did you expect them to come out and say they were dumping the guy because he was a bad risk and they didn’t want to lose more money on him? How naïve are you? Obamacare was a handy excuse. The remarkable thing is that there are grown adults who are unable to see through this patent nonsense.
    And isn’t it just swell that health insurance pre-Obamacare never suffered from bill payments, technical glitches and record keeping problems.

  62. Perry N. Thrust

    It’s not at all odd to compare 2013 and 2014 plans in terms of costs and coverage levels. The issue we are discussing is whether the President’s claim that if you lose your insurance you can shop in the exchange to find a better plan at a lower cost is credible. Since you lose your plan at the end of 2013 and must replace the plan for 2014, we must necessarily compare 2013 and 2014. Also, since the President asserted that you will be able to find a BETTER plan on the exchange at a lower COST, we need to compare both insurance coverage and costs.
    While we are on the subject of Presidential dissimulation, here are a couple more examples. Just a few days ago, the President asserted that there are other ways to sign up for Obamacare. He gave out the phone number and claimed that consumers could sign up over the phone in 25 minutes. Watch this ABC news report that points out that the Administration’s own memos show that they know this must be false, since the phone operators rely on the website working. The report also shows a man who has tried for 2 weeks to sign up by phone.
    It’s also very instructive to go back in time, to the health care summit in Feb 2010, just one month before the President signed Obamacare. In this video, Republican Eric Cantor explains to the President his concern, which is that since the bill will mandate coverage, it will necessarily result in cancellation of insurance policies. Cantor even cites the CBO analysis to the President that 8-9 million people could have their coverage cancelled.
    Despite his repeated promise that “if you like your insurance you can keep your insurance,” the President amazingly enough admits that that many people would lose their coverage, but explains it away by claiming that people will be able to get better coverage at lower cost on the exchange, the same canard that prompted Professor Hamilton’s post.
    If you watch further, you see another amazing deception. When pressed further on the issue by Cantor, the President, in a brazen falsehood, claims that the mandates for health insurance will only apply to people without insurance shopping on the exchange, not to people who already have insurance.
    It’s all on tape.

  63. Perry N. Thrust

    I have looked at the Singapore system and features of it do make sense, although I could do without some of the government intervention.
    We are all going to die of something and when that time comes, we would have done well to plan to spend the majority of our health expenditures at that time. This is a certainty and thus not insurable. We do need to save for this certainty and health savings accounts are a good idea. I also think it makes perfect sense to pay out of pocket for most medical care with that same health savings.
    What is uncertain is the timing of that final illness. We should insure that timing, in case it happens before we have had enough time to save. Moreover, there are other health conditions that are not necessarily fatal that we should insure against.
    In a free market health system, I think what would emerge is that people would pay for routine medical needs out of pocket. The more expensive items, such as knee replacements, etc. would be financed just as houses and cars are now. And people would have catastrophic insurance with a very high deductible for everything else. Unfettered, financial markets will be very good at helping people manage this risk effectively.
    Different business models for medical care would emerge and a whole menu of care would exist at different price points. Prices would signal demand and supply and allocate resources. Ultimately, contrary to what people think, a competitive system run by medical entrepreneurs would drive down the cost of medical care, making it more accessible and affordable to the poor, not less so.
    People confuse access to care with access to insurance. One does not necessarily imply the other. But I maintain, and I expect that you will agree, that if medical care is treated like any other service, it will be much cheaper and more available to people than it is now. Everyone will be better off.
    By the way, I am curious about what you think I got wrong about the swiss medical system.

  64. Perry N. Thrust

    So far, people have been focusing on the mendacity of the Administration, and rightly so. Democrats in Congress are happy with that and are starting to distance themselves, hoping that voters will forget their own deep involvement. However, we must remember that the deception here was not just from the Administration. The entire Democratic party is fully complicit.
    Everyone is pretending to be shocked that people are losing their insurance despite all the promises. But no one who has been paying attention is surprised. And certainly no one in Congress is surprised.
    After the Obama administration wrote the rules that would inevitably lead to millions of people being forced into Obamacare, Republican Senator Mike Enzi of Wyoming introduced a measure in the Senate S.J. Res. 39 on Sept 21, 2010 for Congress to disapprove of the Administration’s action. Here is what Senator Enzi is quoted as saying at the time:
    “At least 47 separate times, President Obama promised ‘If you like what you have you can keep it.’ Unfortunately, the Obama Administration has already broken that promise,” Enzi said.
    “The reality for many, under this new regulation, is that if you like what you have, you can’t keep it,” Enzi said.
    It was very clear what the effect of the regulation would be to everyone. All Republicans voted in favor of Enzi’s resolution. All Democrats voted against it.
    Although we should hold the Administration accountable for the fraud in selling obamacare, we should not forget their Democratic party allies in Congress, who knew what would happen but went along with it. There are a number of blue senators up for reelection in red states in 2014. It will be important to remind voters of the facts so that they can hold these senators accountable at the ballot box.

  65. Ricardo

    Since you have drunk the koolaid and do not see the inefficiencies that government introduces anytime they try to run businesses any answer I give you will not satisfy you. Your questions deomnstrate that you are a “believer” rather than an objective economist.
    1. Why should charity cover all those uninsured? This is a Progressive idea of equality over freedom, equality over prosperity.
    2. Why appeal to other countries that already have socialized medicine for proof that socialized medicine works. Socialized medicine brings equality of health care not better health care.
    3. Prior to the 1960s when the government begin to socialize medicine the nations of the world all saw the US as providing by far the best health care at the lowest cost in the whole world. The more the government socializes medicine the lower the US falls in health care. What you have to understand is that socialized medicine does not provide better care, it provides more equal care. Socialized medicine does not allow those with the best care to continue to experiment and improve care, but it pulls those with the best care down and essentially stops innovation in medicine at the expense of bringing the classes to more equality. But if equality creates a condition where all have worse health care is it bettter than an unequal system where the worst care is better than other countries that work toward equality?
    The socialist demands for equality has blinded you to the prosperity that comes from freedom and liberty.

  66. tj

    Well, DUH! Of course they would. Did you expect them to come out and say they were dumping the guy because he was a bad risk and they didn’t want to lose more money on him?
    Thanks for making my point. You refuse to acknowledge that a complete overhaul of the U.S. health care system has any impact on cancellation decisions.
    Radical Progressives wrote the legislation for crying out loud. Did you honestly think it would work? You can’t force radcial Progressivism on a society where the majority of people are in the political middle. The lies and deception worked until implementation. People are starting to feel the impact and they simply don’t like it. They don’t like the bait and switch used by Obama and the Democrats.
    Trying to fix the U.S. healthcare system with Obamacare is like trying to fix a wrinkled shirt with a steamroller!

  67. baffling

    tj, ricardo, perry et al,
    a basic view of many folks in the country is the health care system prior to obamacare was broken and flawed. if you agree with this statement, then you agree an overhaul was needed. republicans had plenty of opportunity during the bush years to implement solutions-they did NOTHING! lost your opportunity, so another group stepped up to the plate. quit being a backbencher and do something productive in your lifetime! your inaction in the past was failure, and now you are crying foul. too late! now you can be part of the solution and make the transition smoothly, or you can be an obstructionist and then cry fould when the obstruction works. but change is acomin whether you like it or not! welcome to the real world.
    the net change in obamacare is positive-not negative. only 5% of the population is private policy, while 16% was uninsured. the rest are basically unaffected by the program. net positive no matter how you spin the numbers.

  68. Anonymous

    I love the liberal theme being parroted out.
    “The ACA is not responsible for how the private market changes in reaction to the ACA.”

  69. Anonymous

    “Jeffrey is right that the Swiss system works well”
    The Swiss system is also implemented on a homogenous culture.

  70. Anonymous

    ricardo, should we abolish medicare?
    Posted by: baffling at November 5, 2013 08:08 AM
    If we did, health care costs would immediately plummet.

  71. Anonymous

    “Ricardo – what percent of income would Americans have to contribute to charity to cover the uninsured and those in need? Why aren’t they *already* donating enough money to cover the uninsured and those in need? ”
    Well, since they don’t, now we must force them to!

  72. Anonymous

    You know exactly how bad a law is based on how infuriated its supporters get when based negative facts are introduced. It is laughable that libs here are claiming it is not the ACA’s fault that everyone’s plans are changing. These people literally are insane.

  73. 2slugbaits

    tj Radical Progressives wrote the legislation for crying out loud.
    Right. Radical Progressives like the Heritage Foundation and Mitt Romney. Sure. You betcha.
    Did you honestly think it would work?
    Well, it’s worked in at least one state as well as several European countries. And just like any program, there will be bumps along the way, but after awhile people won’t want to give it up for exactly the same reason that they don’t want to accept it today…a lot of people just have a bias against any change of any kind. You’re a perfect example.
    BTW, by way of Mark Thoma and Bloomberg news we now have an admission from UnitedHealth as to why they cancelled so many programs. It wasn’t because Obamacare made them…it’s because they only want to collect premiums without actually providing insurance. Here’s what Bloomberg said:
    UnitedHealth will “watch and see” how the exchanges evolve and expects the first enrollees will have “a pent-up appetite” for medical care, Hemsley said. “We are approaching them with some degree of caution because of that.”
    It really didn’t have anything to do with Obamacare per se…they just didn’t want to provide insurance protection. So people like the guy in your example would have been S.O.L. no matter what because UnitedHealth regards them conditionally as bad risks. They would have dumped the guy even without Obamacare.
    Trying to fix the U.S. healthcare system with Obamacare is like trying to fix a wrinkled shirt with a steamroller!
    Well, if you don’t like the conservative Heritage Foundation based solution, the next stop will be single-payer. Would you like that more?

  74. baffling

    “Trying to fix the U.S. healthcare system with Obamacare is like trying to fix a wrinkled shirt with a steamroller!”
    to be clear, from this statement you do not think the us healthcare system had any significant problems, since it is simply a wrinkled shirt?

  75. tj

    Radical Progressives like the Heritage Foundation and Mitt Romney
    Do radicals all take the same course in misdirection and deception? It would sure seem so, based on the various strategies you use to mislead and steer the conversation away from the issues that put the loonie left in a bad light.
    I assume you are referring to the individual mandate. As far as I know, that’s the only way to solve the adverse selection problem, if you want to offer a government option with reduced premiums compared to actuarially fair premiums .
    You know well what I am referring to, and it’s not the individual mandate. Heritage and Romney did not write, and continue to write tens of thousands of pages of rules and regulations that make it increasingly difficult for individual to insure through private insurance.
    Consider the 3 legs of the insurance stool. Individuals – employers – government. The first stage of Obamacare takes out the individual market. In the near future, the only option for individuals will be a government plan. Next, current and new policy will be written to regulate employers out of the market. Once those 2 legs are gone, the only option left is government provided healthcare.
    Obama and other radicals have admitted this goal in public on various occasions. Your refusal to recognize it makes you look foolish.
    The bottom line is that the key parts of the policy was, and are, being crafted by radicals. Obama and fellow Democrats used lies, deception, kickbacks, etc to push the law through on a party line vote. How on earth does such an historic piece of social legislation become law on a party line vote that more or less passed without any meaningful input from House of Representatives or Senate Republicans?
    If that doesn’t make it obvious that this was never about what’s best for America, then you are hopelessly lost down the loonie left rabbit hole.

  76. benamery21

    tj: supporting government provided healthcare makes one radical? Be sure to tell everyone over 65.

  77. baffling

    tj, you sound like a recording of rush limbumb and hannity! at least you make me chuckle.
    anonymous, you certainly are an active little troll. but your statement that eliminating medicare would immediately plummet health care cost is laughable. yes, cost would go down because all the retired folks would be unable to obtain and afford healthcare. i guess you have no problem with leaving old folks without medical care. the rest of us in a civilized society believe otherwise. think before you write on this blog.

  78. baffling

    “How on earth does such an historic piece of social legislation become law on a party line vote that more or less passed without any meaningful input from House of Representatives or Senate Republicans?”
    Exactly. Why can’t Republicans work with others when they are in the minority? Because of the no compromise attitude. They are afraid of compromising because of the nasty radicals in the GOP who will eat their own young to try and achieve their own agenda. a prime example was the govt shutdown and debt ceiling. plenty of republicans were afraid of it, but even more afraid of the vicious attacks from their own radicals if they supported any compromise at all.

  79. benamery21

    Anonymous: Switzerland is so homogenous it has 4 different official languages, and the most common of these represents only about 60% of the population, and by self-identification even these folks speak different languages (strong differences in regional dialects). There’s a reason it’s a republic.

  80. tj

    Did 2slugs give you a copy of his leftist manual on lies, deceipt and misdirection?
    The right offered to compromise. You conveneintly forget they proposed delaying the individual mandate in exchange for ending the shut down and the debt debate.
    Your president, through his puppet Reid, rejected the offer. You need to retract your statement above because it’s not true.
    Your president isn’t much better at telling the truth, so maybe you were just emulating your president.
    Obama Officials In 2010: 93 Million Americans Will Be Unable To Keep Their Health Plans Under Obamacare
    BARACK OBAMA in 2010: Actually, any insurance that you currently have would be grandfathered in so you could keep it. So you could decide not to get in the exchange the better plan. I could keep my Acme Insurance, just a high deductible catastrophic plan. I would not be required to get the better one.
    BARACK OBAMA in 2012: “If you like your plan, you can keep it.”

  81. baffling

    “The right offered to compromise. You conveneintly forget they proposed delaying the individual mandate in exchange for ending the shut down and the debt debate.”
    the compromise needs to occur when the law is being written-not afterwards. republicans took the stance that if they were involved with the creation of the ACA, even through compromise negotiations, they would be responsible for passing the bill. hence they abstained from formulating the policy of the bill in any direct way. bad decision since their views did not get incorporated into the law.
    hostage taking during the govt shutdown for a delay is not compromise. you already missed your opportunity to work on the legislation several years ago, when it was crafted and passed. now you are simply crying over spilled milk. quit revising history, and get over it!

  82. Randall Parker (@futurepundit)

    2slugbaits asserts:

    It’s sad how choked up a lot of conservatives get when the government forces people to get better, real insurance;

    Better? I would rather buy a higher deductible policy that is cheaper and pay for health care out of pocket. This is more cost effective. Cuts out the middle man. Gives me far more choices in treatment options. Don’t have to ask whether a doctor is on this or that insurance policy.
    Medical insurance for regular every day care is a product of the tax law starting with Henry Kaiser in WWII. It is a bad idea. It should not be forced on more people by government by fiat.

  83. tj

    You are horribly misinformed. If Dems wanted to compromise they would have sent the bill back to the house, or to committee. Instead, they hijacked a bill, inserted the ACA, then passed it with no opportunity for amendments! That’s not really an amendment friendly atmosphere the left created now is it?
    Obama unilaterally changed the law several times after the bill was passed. Why can he make changes, but the right can’t even propose a change?
    Take off your blinders kid! You are being played for a fool by your loonie left leadership.

  84. tj is baffling

    bills end up passing in what appear to be unfriendly ways, but that is simply a reaction to the obstructionist attitude of the conservatives. they do not want to compromise-they feel it shows weakness. so the only thing left to do is obstruct-shut everything down so a vote could never occur. they have been doing this for YEARS! obama and the dems simply took the only path available. you can’t cry foul at this point. the only compromise from the right was no bill!
    the govt shutdown and debt limit debacle is just the latest of these obstructionist behaviors. take your blinders off kid-it’s right in front of you. quit revising history and open your eyes!

  85. John Yard

    My favorite medical inflation story is hearing aids. They are not covered by most insurance, so blaming the gov’ment is not relevant.
    The cost of electronic devices has plummeted in the last 20 years. The cost of hearing aids has escalated. Your home pc has a component density thousands of times that of a hearing aid. You can get a decent PC for a price in the hundreds of dollars. A hearing aid will set you back $3-4000 .
    I would like to see a study of the pricing behind this medical device .

  86. Randall Parker (@futurepundit)

    Jeremy, Could you take your own advice please?

    I think this blog would do better to stick to facts.

    A country that graduates 41 lawyers for every engineer has a real problem!

    Want facts? 40k lawyers per year versus 70k engineers per year.
    70k is bigger than 40k.
    As for the “country” graduating 40k lawyers per year: It is my understanding that people aren’t drafted into going to law school. They choose to go in spite of declining salaries for lawyers and decreased demand. I’d love to see an end to forcing taxpayers to fund useless college majors. But I suspect our bigger problem is that most of the minority of people who are smart enough to study engineering do not want to work that hard.

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