Obamacare implementation as teachable moment

4:29 am in Uncategorized by danps

Cross posted from Pruning Shears.

Here is an interesting thing about the new health care law: News stories on it sometimes conflate flaws in the existing system with those in the new one. Many complaints about Obamacare are actually complaints about America’s health care system.

The administration bears some blame for that; the White House has done some conflating of its own. Most famously, the president assured us we would be able to keep our plans. That was never a promise he was in a position to keep. The new program still goes through the private insurance market, which means they decide what customers are restricted to.

But that has always been the case. Insurers playing around with provider networks, policies etc. is a longstanding feature of the system. It’s not as though Obamacare introduced it. It was foolish, though, for the president to speak as though he was the one in charge of that. The only way to guarantee that is to prohibit insurers from altering their policies.

Here is another example of bad policy that predates Obamacare. As the saying goes, programs for the poor are poor programs. Meaning, there will never be a formidable Big Poverty lobby on K Street, so programs that are means tested will not have natural allies in the halls of power. However well intended (and effective) they are at launch, over time they will languish and get chipped away at. Universal programs are much more robust and likely to not just survive but thrive over the long term.

We have something like a controlled experiment in that when it comes to the federal government and health care. There’s a universal program (Medicare) and a means-tested one (Medicaid). Any politician who supports Medicare cuts immediately becomes an endangered species. Medicaid cuts, though, are fair game.

Washington state, for instance, expanded its Medicaid “estate recovery” provision in 2004 to include all medical expenses, not just long term care. So should your net worth not be entirely wiped out by that end-of-life nursing home stay, should you have some small amount left over that you were thinking might help your survivors defray the cost of, say, your funeral: Forget it. The state will also charge you for the aspirin you popped along the way.

But because this happened to a means tested program, not a universal one, who (that matters, anyway) was going to raise a fuss?

Fast forward to Obamacare. Medicaid expands and begins taking in people at higher incomes. Suddenly, people scraping the lower end of the middle class are eligible for benefits. While this group is not exactly calling the shots, it can create at least a little noise:

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