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One thing I wonder about ACA: it seems like the young/healthy who bought their own insurance have had their premiums go way up compared to before (and also they

by hundt 10y ago

One thing I wonder about ACA: it seems like the young/healthy who bought their own insurance have had their premiums go way up compared to before (and also they are penalized if they don't buy insurance, so presumably more of them buy it now), and I haven't heard about any large groups of people whose premiums went down. So, more money is going into the system than before. Where is the extra money going? Here are the possibilities I can think of: - Better health outcomes for the previously uninsured or uninsurable. This would be the case if the previously uninsured just didn't get useful medical care before ACA, and now they do. In this case we might see longer life expectancy, increased happiness, or some other improved health care outcome. - Less money out of the pockets of the previously uninsured. This would be the case if the previously uninsured used to get the medical care they needed anyway, but had to pay a lot for it. In this case we might see, for example, fewer medical bankruptcies. - More profits for insurance companies or medical service providers. This could be the case if providers were directly or indirectly subsidizing the previously uninsured when they couldn't pay their bills. (If this is true I'm assuming they didn't simply pass the costs on to the previously insured, because that should have resulted in a lot of people's premiums going down after ACA, and apparently that didn't happen.) Do you have a sense of whether these things have happened, or do you expect them to happen in the future? Or maybe I missed some other possibility.

tptacek 10y ago
You're missing that for a very large collection of new insureds, premiums did go down, from Inf to hundreds of dollars. "The ACA" doesn't charge premiums; insurers do. They increase premiums when actuarial values change. The ACA did two big things to change those values: * It introduced tens of millions of formerly uninsured people to the system; if you were previously uninsured, you're also more likely to be costly to insure (there's a correlation between being stably employed and being healthy, for instance, and the stably employed have always tended to have insurance) * It required insurers to cover without caps or recission and for policies to have minimal actuarial value to customers, all of which were levers that insurers used to lower premiums in exchange for reduced service to customers. To believe that ACA red tape was a primary driver for increased premiums, you have to ignore the ratio of money insurers spend on medical costs versus administrative overhead, which is reported annually. It's hard to see how anything in the ACA could have driven up the cost of an doctors visit or an MRI. And yet that's where the expense is growing: to wit, more people are getting more procedures now that they have coverage.
- hundt 10y ago
  Yes, I understand those points, and I tried to make that clear in my comment, but I guess I failed. More people are insured now, against more risks. I get it. My question is, now that we as a society are paying for these extra services (expanded risk pool and reducing the ability of insurers to deny coverage), what is the economic benefit that we expect to get as a result, and have we seen evidence of it yet? I hypothesized three possible benefits, and was wondering which one you expect to see, or if you think we've seen it already. To be clear, this is not an effort to prove that ACA was ineffective. And I didn't say anything about red tape. I'm just trying to understand the economics of the situation, to have a framework for thinking about it beyond "more people have (useful) insurance now." Edit: thinking about it more, I feel like my comment may come off as demanding that you prove the value of the ACA in some objective sense, especially given the thread it is attached to. Sorry if that is the case. I am mostly just trying to understand the mechanisms by which broadening health insurance access improves society. If the answer for you is just "now my family and others like it don't have to live in fear of getting sick" then I don't mean to imply that that is an inadequate reason to be happy about the ACA.
  - tptacek 10y ago
    For the many millions of people who are insured today thanks primarily to the ACA, the economic impact includes: * Access to preventative care that keeps them out of the ER, where the expense of their care is maximized * Financial contribution to their care, rather than the previous expectation that they would simply default on gigantic medical bills or go bankrupt, in either case leaving everyone else in the market to absorb their costs * The availability of guaranteed-issue insurance on the individual market reduces job-lock and, for us in particular, makes it possible to start companies without worrying about how to secure insurance for our families. Health insurance has been a top 5 issue for the founders I've talked to about it (obviously, myself included). The thing you need to remember about risk pools and denial of coverage is that health insurers can't deny health services to people, only insurance coverage. For a variety of reasons, including the fact that insurers have collusive secret pricing deals with health care chains, but also the fact that acute health care is just crazy expensive to provide, almost anyone who doesn't have insurance will simply be bankrupted by medical events without coverage. When that happens, it's not like we don't pay for it; it's just that our insurance companies get to dodge a bullet that we collectively have to take for them.

by hundt 10y ago

tptacek 10y ago

You're missing that for a very large collection of new insureds, premiums did go down, from Inf to hundreds of dollars. "The ACA" doesn't charge premiums; insurers do. They increase premiums when actuarial values change. The ACA did two big things to change those values: * It introduced tens of millions of formerly uninsured people to the system; if you were previously uninsured, you're also more likely to be costly to insure (there's a correlation between being stably employed and being healthy, for instance, and the stably employed have always tended to have insurance) * It required insurers to cover without caps or recission and for policies to have minimal actuarial value to customers, all of which were levers that insurers used to lower premiums in exchange for reduced service to customers. To believe that ACA red tape was a primary driver for increased premiums, you have to ignore the ratio of money insurers spend on medical costs versus administrative overhead, which is reported annually. It's hard to see how anything in the ACA could have driven up the cost of an doctors visit or an MRI. And yet that's where the expense is growing: to wit, more people are getting more procedures now that they have coverage.

hundt 10y ago
Yes, I understand those points, and I tried to make that clear in my comment, but I guess I failed. More people are insured now, against more risks. I get it. My question is, now that we as a society are paying for these extra services (expanded risk pool and reducing the ability of insurers to deny coverage), what is the economic benefit that we expect to get as a result, and have we seen evidence of it yet? I hypothesized three possible benefits, and was wondering which one you expect to see, or if you think we've seen it already. To be clear, this is not an effort to prove that ACA was ineffective. And I didn't say anything about red tape. I'm just trying to understand the economics of the situation, to have a framework for thinking about it beyond "more people have (useful) insurance now." Edit: thinking about it more, I feel like my comment may come off as demanding that you prove the value of the ACA in some objective sense, especially given the thread it is attached to. Sorry if that is the case. I am mostly just trying to understand the mechanisms by which broadening health insurance access improves society. If the answer for you is just "now my family and others like it don't have to live in fear of getting sick" then I don't mean to imply that that is an inadequate reason to be happy about the ACA.
- tptacek 10y ago
  For the many millions of people who are insured today thanks primarily to the ACA, the economic impact includes: * Access to preventative care that keeps them out of the ER, where the expense of their care is maximized * Financial contribution to their care, rather than the previous expectation that they would simply default on gigantic medical bills or go bankrupt, in either case leaving everyone else in the market to absorb their costs * The availability of guaranteed-issue insurance on the individual market reduces job-lock and, for us in particular, makes it possible to start companies without worrying about how to secure insurance for our families. Health insurance has been a top 5 issue for the founders I've talked to about it (obviously, myself included). The thing you need to remember about risk pools and denial of coverage is that health insurers can't deny health services to people, only insurance coverage. For a variety of reasons, including the fact that insurers have collusive secret pricing deals with health care chains, but also the fact that acute health care is just crazy expensive to provide, almost anyone who doesn't have insurance will simply be bankrupted by medical events without coverage. When that happens, it's not like we don't pay for it; it's just that our insurance companies get to dodge a bullet that we collectively have to take for them.