OK, so we've all heard the complaints: "Obama lied. I can't keep my insurance, and my new insurance is more expensive."
And the overwhelming response is: "Your old plan was crap, you should embrace the new plan."
In other words, to the person who complains about this, the response is: "you're stupid, and the government knows better than you do about what you need."
Really? Must that be our response? Can you spell n-a-n-n-y-s-t-a-t-e? Does insulting your critics win them over?
There is a good response. A mature one. But it involved some thinking rather than a knee jerk reaction.
Follow me below the fold . . .
First: the problem. Yes, it is true that many of those who are getting their insurance cancelled are ending up getting much better insurance. But we have to realize: that isn't always the case.
Yesterday, WaPo published an article describing some of these.
E.g.:
After receiving a letter from her insurer that her plan was being discontinued, Deborah Persico, a 58-year-old lawyer in the District, found a comparable plan on the city’s new health insurance exchange. But her monthly premium, now $297, would be $165 higher, and her maximum out-of-pocket costs would double.
That means she could end up paying at least $5,000 more a year than she does now. “That’s just not fair,” said Persico, who represents indigent criminal defendants. “This is ridiculous.”
I'm guessing she's not stupid, and that she actually is one of the "losers" under Obamacare. Further, as she represents indigent criminal defendants, she probably actually has empathy towards the underprivileged in our society. I doubt she has tea-party inclinations.
So what's the response?
It's a feature, not a bug.
This is the harsh reality, but it is the reality. Estimates are that three-to-five percent of insurance holders will be worse off under Obamacare. We need to be mature about it an accept it -- you can't restructure an entire industry and expect 100% winners and 0% losers. The essential part to this response is that there are tradeoffs to be made -- and the winners grossly outnumber the losers. But to deny the existence of losers is silly.
Josh Barro is a conservative pundit (who, actually, has abandoned the Republican party recently) and is currently Politics Editor for Business Insider. He wrote a great column recently called "Why 'Rate Shock' Is An Essential Part Of Health Care Reform"
After pointing out that "Once Obamacare is implemented, America's health insurance system will be a thicket of subsidies and transfers that benefit some people and harm others" he notes:
But here's the thing: Before Obamacare, our health insurance system was already a thicket of subsidies and transfers. The law doesn't simplify the system, but it does make the thicket of subsidies and transfers more sensible: directed more at people who have low incomes or high health needs, and greatly shrinking the share of the population that doesn't have health coverage at all.
Making the thicket more sensible will mean that some people's costs go up, producing "rate shock."
He notes another reason why some rates will go up -- including the most obvious one:
It's a lot cheaper to provide health insurance coverage if you exclude a lot of the people who need it most. Making insurance available to people with pre-existing health conditions costs money. Obamacare funds this transfer to the chronically ill in part by raising premiums on healthy people.
Tradeoffs. It's tradeoffs.
Barro concludes by looking at the big picture:
The new system of subsidies and cross subsidies that Obamacare sets up is far from perfect. But perfect is not on the table. The question is "is it better than the old system, where huge subsidies go to people with no need for them and tens of millions are left uninsured?" That answer, if you consider the costs and benefits honestly, is yes.
But conservatives don't do that.
For the last few weeks, I have seen a vast outpouring of conservative sympathy for young, healthy, prosperous people whose health plan premiums are going up. These poor, poor things. How could Barack Obama do this to them?
...
But what about the tens of millions of Americans who currently lack health insurance and are about to get access to available, affordable coverage? Where is the conservative sympathy for people who would be worse off if the law doesn't go forward?
Nowhere. Because for all the needless complexity of liberals' approach to improving health insurance and helping the sick, conservatives don't have one at all.
This morning,
Ezra Klein and Evan Soltas make similar observations in a column from today's Wonkblog. They write:
Republicans [who are criticizing] are endorsing a terribly dysfunctional status quo.
Put very simply, you can't reform the health-care system without disrupting the insurance some -- or many -- people currently get. That's true for single payer. It's true for Obamacare. And it's true for every Republican plan, too.
As Philip Klein writes at the conservative Washington Examiner, "Even if free market health care reformers were able to pass the plan of their dreams — which would involve tweaking the tax code to end the bias in favor of employer-sponsored insurance — it would likely mean a lot of people would get dropped from their current plans."
They go on to offer a key insight: that
part of the weakness of Obamacare is a necessary outcome by trying to be the least disruptive as possible, and trying to let so many people keep their insurance. For example: the insurance exchanges, at least for now, are closed to large employers. And the (now-delayed) "employer mandate is built to encourage employers to keep offering coverage rather than transition them to a new system." This means, then, that the real changes are in the individual market -- which is exactly where people are complaining about change.
They note:
John McCain's 2008 plan would've been far more disruptive, as it would've upended the employer-based market. Single payer would be much more disruptive. Bill Clinton's plan would've been much more disruptive. There's no plan out there that actually fixes major problems in the system but doesn't lead to some percentage of Americans waking up one day and finding their insurance arrangements altered, sometimes for the worse.
All in all: Obamacare seems to be the least disruptive option possible, given that the plan aims to eliminate pre-existing conditions and subsidizes the cost for the poor.
To repeat Barro's framing:
The new system of subsidies and cross subsidies that Obamacare sets up is far from perfect. But perfect is not on the table. The question is "is it better than the old system, where huge subsidies go to people with no need for them and tens of millions are left uninsured?" That answer, if you consider the costs and benefits honestly, is yes.
It'd be nice if the media focused on that. Instead of making big news out of some of the 3-5% of the losers in Obamacare, if they would try to make some big news over the middle aged couple with pre-existing conditions that now can finally get some insurance. Anybody know how to make that happen?