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You are right about the math of the 'Death Spiral.' If we simply deregulated AHPs without a safety net, healthy people would flee, leaving the sick in a collaps
by kmundy 10mo ago
You are right about the math of the 'Death Spiral.' If we simply deregulated AHPs without a safety net, healthy people would flee, leaving the sick in a collapsing ACA pool. That is exactly what happened in the pre-ACA 'bad old days.'
But my proposal isn't just 'Deregulation.' It pairs AHPs with a specific mechanism designed to stop that spiral: Invisible High-Risk Pools (The Maine Model).
The 'Maine Model' allows insurers to 'cede' their highest-risk patients to a state-funded reinsurance pool. The patient keeps their same card and doctor (hence 'Invisible'), but the risk is offloaded.
The Data: Before the ACA, Maine implemented this. Anthem requested a 20% rate hike due to adverse selection. After the pool was implemented, the rate hike dropped to under 2%.
This shows we can protect the sick without forcing the healthy to pay $25k/year premiums to an oligopoly.
Regarding other countries: I’d love to write that article! But most of them (like Germany or Switzerland) succeed by strictly regulating prices or supply. In the US, we have the worst of both worlds: we cap insurer profits (via MLR) but leave costs unchecked, which actually incentivizes inflation. My 'Three-Legged Stool' proposal is an attempt to engineer a path out of that specific American trap.
- GlibMonkeyDeath 10mo ago>The Data: Before the ACA, Maine implemented this. Anthem requested a 20% rate hike due to adverse selection. After the pool was implemented, the rate hike dropped to under 2%. >This shows we can protect the sick without forcing the healthy to pay $25k/year premiums to an oligopoly. So in effect give the oligopoly tax money so they keep their rates the same for the sick and the well? Isn't that what Congress is basically currently fighting over (federal money vs. state?) Congress also intentionally removed the unpopular requirement to have to buy insurance (either through your employer or the ACA market), essentially re-creating one of the death-spiral conditions in the first place. It's been the Republican goal all along to get the ACA to die in a death spiral so we can go back to forcing people into medical bankruptcy, like God intended.
- kmundy 10mo agoWell, the subsidy just buys us some time to stabilize the risk pool. Meanwhile, the ACO+Factory model is emerging, which flips the incentives; changes the way the product is consumed, so we stop overpaying in the first place.
- GlibMonkeyDeath 10mo agoI agree we need to remove the perverse incentives across the entire system. I also agree the current ACA subsidies are a band-aid. It's incredibly frustrating because this is a solved problem - even just fixing the most egregious flaws in the ACA would be a huge improvement. I am very skeptical, though, that in my lifetime American voters will ever be unified enough again to take on the de facto doctors union, the health insurer oligopoly, and the pharmaceutical companies, all of whom currently benefit from the broken system, and basically control the government top to bottom.
- kmundy 10mo agoYou’re right—Congress is the bottleneck for the important stuff (Residency Cap, MLR). And the lobby is massive. I'm a tad more hopeful than you though. I'm hoping that if we all have a shared understanding of how these well intentioned rules (MLR, GME caps) are unwittingly benefitting insurers, it helps bring some clarity into what precisely needs to change & will, perhaps, build some pressure on legislators.