Forums - Politics Discussion - The strategic brilliance of the Affordable Care Act

Whether you're a supporter of it or not, one has to admit, long-term, that the Affordable Care Act is, strategically, a brilliant piece of legislation.

I think nobody was really satisfied by the individual mandate (the right sees government overreach, while the left hates private insurance companies who will get fat off of this), but now that it has survived its court challenge, the mandate enables the most important clause of the law: insurers cannot discriminate against customers based on pre-existing medical conditions.

Now, such non-discrimination clauses were tried before in some states, and health care costs skyrocketed because of it, because it makes sense: you're forcing businesses to accept "Big Loser" customers who will always be a drain on resources, so they'll need to fleece the regular customers more to maintain the same levels of profit (or profitability at all, i know little about the operating margins of health insurance companies). The best way to balance that out would be to force everyone to get health insurance, broadening the base (especially since it often tends to be young, relatively healthy people who go without) of people who will pay for health insurance but are less likely to use it, meaning that the insurance companies can be saddled with the Big Losers without having to hike rates across the board.

What this means, then, is that the individual mandate is essential to keeping the important Non-Discrimination feature. So any scheme the Republicans could come up with would have to address Non-Discrimination. Remove the individual mandate but not Non-Discrimination, and rates shoot sky-high, which could lead to an interesting crisis where everyone but the most sick drop health insurance because its too expensive, ruining the entire industry (as then their *only* base would be Big Losers).

Then we get to the fact that Non-Discrimination could easily be made into the new third rail of American politics, especially since insurance companies had Diabetes as a "do not insure" condition in a lot of cases. That's 26 million voters right there, a good chunk of them from red states, and Republicans are really going to say "We're going to make it so that nobody will insure you."? This is leaving aside a lot of other pre-existing conditions, or the biases insurance companies have against women. Huge swathes of voters could be effected, and so we can no longer go backwards in that regard.

Basically, if there is disatisfaction with the Affordable Care Act, the only politically viable routes are the following

A: removal of the individual mandate, with the required secondary task of extending Medicaid to all of the "Big Losers." (to avoid tremendous political fallout)

B: Moving further forward towards a single-payer system.

It's really quite brilliant if you think about it. Either way, more government intervention in health care is the only solution going forward.



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Mr Khan said:

Whether you're a supporter of it or not, one has to admit, long-term, that the Affordable Care Act is, strategically, a brilliant piece of legislation.

I think nobody was really satisfied by the individual mandate (the right sees government overreach, while the left hates private insurance companies who will get fat off of this), but now that it has survived its court challenge, the mandate enables the most important clause of the law: insurers cannot discriminate against customers based on pre-existing medical conditions.

So...if you got sick from smoking too much or you are sick from being obese they cannot ..not insure you? If that is the case, then that is a huge problem. There should be no way this can be enforced. Or am I missunderstanding?



Mr Khan said:

Whether you're a supporter of it or not, one has to admit, long-term, that the Affordable Care Act is, strategically, a brilliant piece of legislation.

I think nobody was really satisfied by the individual mandate (the right sees government overreach, while the left hates private insurance companies who will get fat off of this), but now that it has survived its court challenge, the mandate enables the most important clause of the law: insurers cannot discriminate against customers based on pre-existing medical conditions.

Now, such non-discrimination clauses were tried before in some states, and health care costs skyrocketed because of it, because it makes sense: you're forcing businesses to accept "Big Loser" customers who will always be a drain on resources, so they'll need to fleece the regular customers more to maintain the same levels of profit (or profitability at all, i know little about the operating margins of health insurance companies). The best way to balance that out would be to force everyone to get health insurance, broadening the base (especially since it often tends to be young, relatively healthy people who go without) of people who will pay for health insurance but are less likely to use it, meaning that the insurance companies can be saddled with the Big Losers without having to hike rates across the board.

What this means, then, is that the individual mandate is essential to keeping the important Non-Discrimination feature. So any scheme the Republicans could come up with would have to address Non-Discrimination. Remove the individual mandate but not Non-Discrimination, and rates shoot sky-high, which could lead to an interesting crisis where everyone but the most sick drop health insurance because its too expensive, ruining the entire industry (as then their *only* base would be Big Losers).

Then we get to the fact that Non-Discrimination could easily be made into the new third rail of American politics, especially since insurance companies had Diabetes as a "do not insure" condition in a lot of cases. That's 26 million voters right there, a good chunk of them from red states, and Republicans are really going to say "We're going to make it so that nobody will insure you."? This is leaving aside a lot of other pre-existing conditions, or the biases insurance companies have against women. Huge swathes of voters could be effected, and so we can no longer go backwards in that regard.

Basically, if there is disatisfaction with the Affordable Care Act, the only politically viable routes are the following

A: removal of the individual mandate, with the required secondary task of extending Medicaid to all of the "Big Losers." (to avoid tremendous political fallout)

B: Moving further forward towards a single-payer system.

It's really quite brilliant if you think about it. Either way, more government intervention in health care is the only solution going forward.

I work for the gov in the medical field and I have to say, every single person here is completely for it. Makes no difference what political affiliation they have, everyone here knows that medical expenses and discrimination are at the heart of the problem.

We were recently all emailed a time special report called "bitter pill" which essentially was a study of health care costs, and throughout which, showed the pricing of over the counter OTC goods being sold at 1000's of a percentage higher than they were worth. A single tylenol at 5$, when you can get 100 for 3$ at a store. Ace bandages at 200$, when they are 5$ at a supermarket, 600$ JUST to be seen by doctors outside of business hours. See a doctor during business hours? No fee. Outside of it? 600$ Like, wtf, there is no rhyme or reason.

Meanwhile, CEOs are expensing costs to the tune of 10s of millions, and being paid whopping salaries.  This money isn't even being used to improve equipment and services, they're being used to pad the board's wallets. Insurance companies don't even know what to do about the whole thing.

 

But I digress.

Oh, and Khan, here's another great thing about the ACA. By including more patients, it expands the production requirements for medecines being made, thereby diluting the costs a la economies of scale. If a company making diabetic medication suddenly has a 400% increase in market size, their cost of R&D drops considerably as profits increase, meaning goods can be sold for a lower price, and research into new medecines becomes cheaper, alleviating the burdens on pharma. All in all, ACA significantly lowers medical prices, and on top of it all, alleviates the stress and burdens a family feels when one of them gets a UTI and has to pay 800$ to see a doctor.

If many people work paycheck to paycheck (which they do) not only will this make things easier for the lower class, but also improve the economy, as people can now spend their money on the things they want, like clothes, electronics, save for starting businesses, etc.



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By this logic I guess any sort of quagmire is strategically brilliant.

spurgeonryan said:

So...if you got sick from smoking too much or you are sick from being obese they cannot ..not insure you? If that is the case, then that is a huge problem. There should be no way this can be enforced. Or am I missunderstanding?

Yes. And they also cannot not insure you if you have a genetic disease, cancer, or some other disease that you were born with or inherited through no fault of your own.

There is no "perfect" solution to this, but pre-existing conditions has always been a load of BS, and it has been something that insurance companies had been abusing to the best of the ability for decades in order to drop or refuse to insure "big losers".

So yes, people who damaged their own health through irresponsibility can get health care coverage. But so can people who just became sick through no fault of their own. Frankly, I don't see how anyone can have an issue with that. As far as I'm concerned, it's the fault of the healthcare companies for abusing it in the first place. If they just refused to insure smokers, or people who are obese through their own diet and lifestyle, then it probably wouldn't have been needed in the first place. But unfortunately capitalism doesn't work like that.

In any case, yeah. Obamacare is here to stay. I'd like to think that we'll move beyond that to something better one day, like single payer. But for now it will just have to do, I suppose. I never thought of it as something strategically brilliant, and personally I've always considered what you cite is more of a byproduct of Obama's tenacity to compromise, Kahn. But you make some interesting points: things can only improve from here.



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It was really nice timing to find out about one of those preexisting conditions. Really glad that I don't have to worry about going broke from my medical expenses which are probably going to be with me for the rest of my life. Not a chance in hell I could afford a 500 dollar shot every 2 weeks.

@Spurge, My understanding is that rates increase dramatically if you smoke, and some companies are considering doing the same for obesity.

...

nuckles87 said:
spurgeonryan said:
 

So...if you got sick from smoking too much or you are sick from being obese they cannot ..not insure you? If that is the case, then that is a huge problem. There should be no way this can be enforced. Or am I missunderstanding?

Yes. And they also cannot not insure you if you have a genetic disease, cancer, or some other disease that you were born with or inherited through no fault of your own.

There is no "perfect" solution to this, but pre-existing conditions has always been a load of BS, and it has been something that insurance companies had been abusing to the best of the ability for decades in order to drop or refuse to insure "big losers".

So yes, people who damaged their own health through irresponsibility can get health care coverage. But so can people who just became sick through no fault of their own. Frankly, I don't see how anyone can have an issue with that. As far as I'm concerned, it's the fault of the healthcare companies for abusing it in the first place. If they just refused to insure smokers, or people who are obese through their own diet and lifestyle, then it probably wouldn't have been needed in the first place. But unfortunately capitalism doesn't work like that.

In any case, yeah. Obamacare is here to stay. I'd like to think that we'll move beyond that to something better one day, like single payer. But for now it will just have to do, I suppose. I never thought of it as something strategically brilliant, and personally I've always considered what you cite is more of a byproduct of Obama's tenacity to compromise, Kahn. But you make some interesting points: things can only improve from here.


very well said



badgenome said:
By this logic I guess any sort of quagmire is strategically brilliant.

Whether they did this deliberately or not, it will work in the favor of those who support universal coverage, ultimately. By crossing the threshold whereby companies no longer have the power to say who they will or will not insure, they've crossed a line that can never (for political reasons) be un-crossed. We can never go back to the world of denied insurance or lifetime payout limits, which means that the only solution to the quagmire (which i agree is a bit of a mess, btw, but such is the nature of political compromise) is to move is closer to universal health care (like i said, the elimination of the individual mandate would require a huge medicaid expansion to avoid political disaster).



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While it will bring the medical side of the problems down there are a lot of problems for the system.
1) There isn't enough doctors to do the required medical checkups which means longer wait times to see a doctor. (This comes from a doctor who says he already having problems with this)

2) It invalidates a lot of insurance that people already have. I got health insurance through my employer when the bill past, I can afford to go see a doctor now but at least I'm lawfully covered or so I thought. I got a letter in the mail at the beginning of the year telling me I have to find more coverage before 2014 or else I will have to pay the $600 fine in addition to paying for the insurance I already have.

3) Come 2014 insurance rate will skyrocket. The money to insure all the uninsurable cases have to come form some where. The anti-scalping law only kicks in if the government, or party can prove they are doing so and not because they need the money to cover bloated number of people they have to now cover.

4)Some doctors will end up charging more. I have a doctor who charged a lower rate if you didn't have insurence ($20.00) but with insurence he charges $45 because of the extra paperwork that is intailed. It is a small practice only him and his receptionist, so there is an increase in labor costs.

I'm not saying it is all bad but there are some real problems that are going to hurt the system especially the lack of qualified doctors, which was a known problem about a decade before because of all the baby boomers getting older.



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BlkPaladin said:
While it will bring the medical side of the problems down there are a lot of problems for the system.
1) There isn't enough doctors to do the required medical checkups which means longer wait times to see a doctor. (This comes from a doctor who says he already having problems with this)
2) It invalidates a lot of insurance that people already have. I got health insurance through my employer when the bill past, I can afford to go see a doctor now but at least I'm lawfully covered or so I thought. I got a letter in the mail at the beginning of the year telling me I have to find more coverage before 2014 or else I will have to pay the $600 fine in addition to paying for the insurance I already have.
3) Come 2014 insurance rate will skyrocket. The money to insure all the uninsurable cases have to come form some where. The anti-scalping law only kicks in if the government, or party can prove they are doing so and not because they need the money to cover bloated number of people they have to now cover.

This is only some of the practical problems of the plan

My point is not to downplay these problems, but to suggest that the only solution to these problems is to move further towards universal coverage, and not away. If things do get bad, all the sooner will such solutions have to be enacted.



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