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OP-ED | Obamacare Opponents Should Be Careful What They Wish For

by | Mar 3, 2015 10:24pm () Comments | Commenting has expired | Share
Posted to: Health Care, Insurance, Opinion, Health Care Opinion, Reprinted with permission from the Center for Public Integrity

“Obamacare is a train wreck, and that’s actually not fair to train wrecks.”

So said Sen. Ted Cruz, R-Texas, at last week’s Conservative Political Action Conference in Maryland. It was a line that drew both applause and laughs, as you would expect from a gathering of folks who view the Affordable Care Act as an abomination.

Chances are that Cruz and his CPAC fans are hoping the Supreme Court will do what Congress has so far been unable to do, when the justices rule in a few months on King v. Burwell. That’s the lawsuit to be argued at the high court this week – the one arguing that the subsidies millions of people are getting in 34 states to help cover the cost of their health insurance are illegal. Cruz and others who despise Obamacare are hoping that if the Supreme Court rules in favor of the plaintiffs, what they consider a scourge on the nation will soon be eradicated.

But if there ever was a reason to cite the maxim, “Be careful what you wish for,” it’s about this lawsuit. A Supreme Court decision that goes against Obamacare would lead to a train wreck with almost unimaginable consequences. And Republicans likely would get much of the blame.

Anyone who thinks such an outcome would usher in an era of a better functioning health insurance marketplace should read the amicus brief submitted by America’s Health Insurance Plans, the industry’s largest trade group.

AHIP’s brief supports the government, not the plaintiffs. It paints a picture not of a new heaven on Earth if the Supreme Court decides against the government, but of a health insurance apocalypse. Not everywhere, though, ironically. The marketplace meltdown would occur only in those 34 states, led primarily by Republican governors, like in Texas, that defaulted to the federal government to operate their health insurance exchanges.

In King vs. Burwell, the plaintiffs argue that the way the Affordable Care Act is worded, the subsidies are lawful only in the states that decided to set up and operate their own exchanges. The sponsors of the legislation insist they never intended the law to be interpreted that way. Nevertheless, opponents insist that the courts should require the government to cut off the subsidies it has been paying to low- and moderate-income individuals and families since the beginning of 2014, in the states with exchanges operated by the feds.

Of course, AHIP is not above fear mongering to get what it wants. But in this case, the consequences undoubtedly would look a lot like what AHIP describes. The organization cites history to demonstrate what the future would look like if the plaintiffs prevail.

Most Americans, including many Republicans, agree that it was not a good idea for insurance companies to be able to deny coverage to anyone just because of a preexisting condition. Or to base policy premiums on an applicant’s gender, age and health. Yet that’s what insurers could do pre-Obamacare. And that’s largely why nearly 50 million Americans were uninsured before the law was passed.

The insurance industry was willing to go along with a requirement that they make their policies available to everyone and that they give up their ability to set prices based on criteria like gender and health status. In exchange, insurers insisted that there be a requirement in the law that everyone be required to buy coverage.

Without the mandate to buy insurance, young and healthy people would once again opt to go uninsured, leaving the marketplace to sicker and older consumers, AHIP wrote in its brief.

AHIP cited as evidence what had happened in years past when New York and a number of other states tried to force insurance companies to accept all applicants without a mandate to buy coverage. Premiums in every one of the states spiked dramatically, and many insurers left those states’ insurance markets because of the “death spiral” that was beginning to result.

A similar spiral would result if subsidies were taken away from the newly insured in those 34 states, AHIP warned. Because 87 percent of the newly insured have such low incomes they qualified for subsidies, most of them – especially the young and healthy ones –undoubtedly would drop coverage if they had to pay the full premium.

“A sicker pool of consumers results in higher premiums, which causes an additional relatively healthy subset of participants to drop out, which in turn results in a further increase in premiums.” That, in essence, is what the death spiral is all about.

In New York, the individual market shrank from 1.2 million to 31,000 between 1992 and 2010, AHIP noted. “At that point, the only people who participated in the market were those who were very sick and affluent,” AHIP wrote in its brief.

Eliminating the subsidies for the newly insured in 34 states would quickly lead to the collapse of the individual health insurance market place in those states just as it did in New York.
Talk about a train wreck. That is one that would be truly catastrophic and injure millions.

Former CIGNA executive-turned-whistleblower Wendell Potter is writing about the health care industry and the ongoing battle for health reform for the Center for Public Integrity.

DISCLAIMER: The views, opinions, positions, or strategies expressed by the author are theirs alone, and do not necessarily reflect the views, opinions, or positions of CTNewsJunkie.com.

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(18) Archived Comments

posted by: Spinoza | March 4, 2015  10:29am

Most republicans are like rabid dogs with respect to Obamacare. And that’s actually not fair to rabid dogs.

posted by: Politijoe | March 4, 2015  1:21pm

Politijoe

It appears that in spite of the ACA becoming law, in spite of the Supreme Court ruling in favor of it. In spite of fifty mock repeals by congress, the more than eight million citizens who enrolled in the ACA or the 2.5 million who participated in the second open enrollment, which over one million were new enrollees. In spite of the millions of Americans who are no longer subjected to pre-existing denials, unaffordable premiums, junk policies or lifetime limits. In spite of the fact US healthcare spending has begun to flatten for the first time in fifty-years. In spite of all this, Conservatives remain committed to repealing the law. Their latest attempt is this challenge Mr. Potter refers to. … the King lawsuit regarding the language of the legislation. I think anyone who reads the legislation clearly understands the intent of the legislation as written. In spite of conservative’s best efforts to mislead the public with manufactured fears of death panels, socialism, government takeover, job killer, frivolous presidential law suits and now semantics regarding the language of the bill the reality is the ACA is working.

For 2015 there was a 25% increase in the number of participating insurers, which offered a greater number of plans. Although there is room for improvement, the public exchanges have turned out better volume and profitability than many carriers expected. Shares of the nations most profitable healthcare chain, HCA are trading at almost 50% higher than this time last year. Universal Health is above 30% and Tenet Healthcare has gained 20%.

The US system of healthcare is convoluted and fragmented. This employer-based for-profit model costs us more than any other nation in the world and still doesn’t insure all our citizens. The ACA is a good first step in addressing these issues by shifting from a payment model that incentivizes volume to a system that is based on the quality of healthcare outcomes and the fiscal value. The ACA is an example of sound fiscal governance. To suggest otherwise is simply uninformed rhetoric based on conjecture.

posted by: art vandelay | March 4, 2015  2:56pm

art vandelay

Another propaganda article from Comrade Potter.

posted by: justsayin | March 4, 2015  4:39pm

Most democrats are like sheep and that’s fair.

posted by: whatsprogressiveaboutprogressives? | March 4, 2015  5:17pm

To use another posters slang, “in spite of” the fact that the Commander in Thief lied to the public about you being able to keep your doctor, the same thief telling us we’ll save on average $2500/person,in spite of the majority of Americans opposing it, in spite of a democratic party majority controlling congress passing it with no reaching across the aisle that is their rallying cry,in spite of house speaker Pelosi telling us we’ll have to pass the bill before we know what’s inside of it, we got it rammed down our throats anyway.
Thanks for playing.

posted by: Politijoe | March 4, 2015  8:14pm

Politijoe

whatabout and Art: you didn’t address ANY of the points just regurgitated the same ol’ rehtoric….. for instance: ” being able to keep your doctor”..... Whatabout Did you have to change your doctor? I didn’t and nor has anyone else who wasn’t on a junk policy. THAT was the intent and to suggest otherwise is simply disingenuous and you know that. Also can you provide ANY data to support your statement ” the majority of Americans oppose the ACA”

And finally I’ll ask again Art Do you participate in VA healthcare or Medicare?

Now let’s address the data, and facts presented absent the silly sophomoric rhetoric.

posted by: art vandelay | March 4, 2015  9:22pm

art vandelay

@Politijoe,
I tried to respond to your comments from the last message from Comrade Potter, but for some reason comments ceased.

I’ll try again.
First, If you ever had the opportunity to take a one or two week vacation with your family did you take over two dozen suitcases and a couple of steamer trunks with you?  I seriously doubt it.  I can safely conclude that the families I witness coming through the International Terminals at JFK are not coming for a quick visit to New York, they are coming to stay!

I also have the opportunity to witness passengers embarking into taxis from international flights asking to be taken to hospitals located near the Van Wyck & Manhattan.

When healthcare reform was first being pitched the main goal was to insure the 13 million who were without it.  I had no issues with that. If one falls on hard times and needs healthcare or a major operation, they should not loose their house or file for bankruptcy. I don’t think anyone has an argument with that.  What I am upset about is the government taking over 1/6th of our nation’s economy.  The federal government was never designed to morph into the monstrosity it is today.

Yes I fear large centralized governments.  Large centralized governments with 5 year plans starved people in countries like Russia & Cuba.  If you don’t think it can happen here, take a good look around you.  The seedlings have already been planted in your backyard.

To answer your last question, no I do not partake in any government health programs and want no part of them.

posted by: Politijoe | March 4, 2015  10:40pm

Politijoe

Art, your observations regarding JFK remain anedotal your’re therefore arriving at a conclusion based soley on conjecture, I think even you would agree this is not an ideal basis on which to base an opinion.

The larger issue as I understand it is that you oppose any government “intrusion” into the marketplace.  However, where do we draw the line, should that extend to veterans healthcare, Medicare, Medicaid, pell grants, FHA mortgage financing, WIC, mortgage deductions, financial regulations, consumer protections, the GI bill, Post office, academic research, Amtrak, the national Academy of Sciences, the national Archives and Records, etc…. I could continue but you see the point. There is precedent, the argument should not be weather government is involved in the marketplace, it has always been, therefore the question is how is it involved in a manner that is conducive to the common good.  With regards to healthcare I have given numerous examples of the moral and fiscal soundness of healthcare reform. So let’s put aside the issue of government involvement in the marketplace because it’s basically a false argument based on the reasons I’ve just stated. Once we eliminate this from the equation we are left with the moral and fiscal components, in an effort to move forward, where do stand on the fiscal soundness of the legislation.

posted by: DrHunterSThompson | March 4, 2015  11:12pm

So Art, if we get rid of the illegal aliens you’re ok with the ACA?

I am.

HST

posted by: art vandelay | March 4, 2015  11:51pm

art vandelay

@Politijoe,
When it comes to what I see, observe & hear at JFK are not anecdotal nor are they based on conjecture.  They’re based on FACT!  I’m there and I see it first hand.  If it looks like a duck, walks like a duck, sounds like a duck, I can only make one intelligent conclusion.  IT’S A DUCK!

I am not oppose to government involvement in the marketplace. I’m not oppose to OSHA requiring two separate “ON” switches so an operator won’t loose a thumb on a guillotine press.  I’m all in favor of government regulations regarding child labor, or safety equipment in mines.  Your list of every government involvement is mind boggling.  It reminds me of the story about the frog being thrown into a pot of water.  The frog will stay in a pot if the water is cold.  Turn up the heat incrementally and the frog will stay in the pot until it’s at full boil.  It’s the same thing with the expansion of our federal government. It started slowly to the point where citizens believe our society cannot function without it.  We need to reverse this belief before it’s too late.

posted by: shinningstars122 | March 5, 2015  7:10am

shinningstars122

I am enjoying the debate between @ArtVandelay and @PolitiJoe.

The point is the majority of Americans think this law is a good start, if Congress would actually work,thanks ruderless Speaker Boehner, the ligitamate issues could be worked out.

Contrary to fact that Art will never accept the US government, ie. the US tax payer has always assumed the risks on grand investment. I can cite the interstate highway system or the internet, and then the private sector comes in and creates jobs and reaps all the profits.

That is the America way I mean @Art why do lobbyist even exist?

For moral reasons?

The AFC is yet another example of that. I think the more people who have access to affordable insurance can in fact receive preventative care years before major aliments, like type 2 diabetes, obesity, and heart disease occur and thus save the systems billions in future cost.

The insurance companies know this for a fact, and if not for this law future costs would continue to escalate due to the facts that half of Americans are unhealthy and that includes plenty of privately insured Americans.

So take that Comrade @Art and just fr the record you don’t even Medicare for your back up insurance?

posted by: Spinoza | March 5, 2015  8:10am

“What I am upset about is the government taking over 1/6th of our nation’s economy.” Where does mythology like this originate? Art, there is no reason to accept Rush Limbaugh’s rants as factual. If you have to listen, treat it as entertainment, not information.

posted by: Politijoe | March 5, 2015  8:47am

Politijoe

Art:  One quick point I think is critical to the conversation. Regardless of the issue, Anecdotal evidence and conjecture skews perspective and creates false impressions which ultimately leads to false conclusions. It sounds like you agree with this. Having said that, your statement “When it comes to what I see, observe & hear at JFK is not anecdotal nor are they based on conjecture. I’m there and I see it first hand.”  ......... Art, the only fact in this statement is that you were present, otherwise it is a very short narrative on a generalized claim which has led you to a false conclusion. This is the very definition of anecdotal evidence. My intention is not to impress you with semantics but to impress upon you the risk of confusing anecdotes with evidence when arriving at a conclusion. 

Your went on to state ” I am not oppose to government involvement in the marketplace. I’m not oppose to OSHA requiring two separate “ON” switches so an operator won’t loose a thumb on a guillotine press.  I’m all in favor of government regulations regarding child labor, or safety equipment in mines.”........... Art this is exactly my point, and that of Shinningstars, that government has always been involved in our markets and should be. The founders intended this. However if you are concerned with the expanding markets and therefore expanding government that is a slightly different conversation that’s begs the question of where to draw that line and if so, why would it be acceptable for government to be involve in manufacturing via OSHA or child labor but not healthcare?

The mistaken ideological belief that free markets alone can solve our economic problems is false. Markets together with government operating as complimentary pillars of the economy produce the prosperity, fairness and sustainability we seek. We should confuse capitalism with democracy.

posted by: Benesource | March 5, 2015  8:53am

Striking down the individual mandate will result in turmoil in the individual insurance markets in the 34 States using the federal marketplace. It’s not good business as it will result in a death spiral and vastly increased rates for those left within those state marketplaces.
I admit that our healthcare marketplace needs an overhaul in spite of the ACA and their so-called market reforms. It places too much of a burden on mid-size and large employers in government fees. A simpler solution for healthcare reform would have been a government subsidized Catastrophic Plan with a high deductible. Then companies and individuals could purchase wrap-around plans under the government deductible of say $100,000.

posted by: GBear423 | March 5, 2015  9:42am

GBear423

Art it’s a loser trying to debate the Obama babies.  They owe their success to entitlement programs and their whole world is based on thinking the programs are the way out of poverty and unfortunate circumstances. I think it is too late for most, its doctrine now.  LBJ would be very proud.  Certainly there are success stories and there is no denying that a capable hard working person can achieve limitless success, thing is, obviously, they are the exception among the millions of beneficiaries.

The author here thinks he can compare Population of Red States to Pop of New York.  It’s just apples and watermelons.  New Yorkers are in the cradle of the American socialist movement. So going to the Govt for their check is no big deal, that mentality is no more prevalent as it is in the big cities of the NE.

Human beings are creatures of necessity, most of them at least.  You take away a job, most will look for another, take away benefits, and most will shop for options or save (gasp). You take away subsidy there are 2 problems:  consumer can’t afford a service and the business has a product not making money… guess what, the price gets lower, either thru existing companies or the new smaller ones that take their place, so the consumer can purchase necessary and well regulated policies and voila, all is well.

Crazzzzzzy idea, but it just might work?  So let’s take away the subsidy and let it Fail.  The Market will right itself.  Nobody likes Insurance companies, though liberals would LOVE to see them all go bankrupt, no?

posted by: UConnHoop | March 5, 2015  11:25am

There is clearly a better way to provide health insurance to people who don’t have it than was the ACA did.  Why can’t vouchers be given to people who earn below a certain amount of money and let them decide how to spend it when they get sick?  If we keep the free market out of healthcare, we’ll end up with a system very similar to the Higher Ed mess we’re experiencing.  When the primary focus is on how to pay for something, where is the pressure to keep price increases in check?

posted by: art vandelay | March 5, 2015  12:55pm

art vandelay

@Politijoe,
From my first hand observations from what I witness at JFK, I stand by my convictions. Let’s leave it at this.  If we were both at Daley Square on November 22, 1963, I would see 3 shots fired at a black Lincoln from the Dallas Book Depository.  You would see heads looking over the grassy knoll and conclude the shots were fired from there.  You would much rather live in a country where you believe a large centralized government controlling our economy is far superior to the freedoms & liberties granted to us by the Constitution.  Progressive & Socialists have very broad interpretations of the Constitution and in many cases wish it was never written and do everything in their power to destroy it.  Obama’s recent actions are a clear example.  I believe the total opposite.  I’ve come to the conclusion that I’m wasting my time and intelligence trying to persuade the extremist left into realizing the damage they are doing to this great country.  My only suggestion would be to relocate to a socialist country like France, Greece, or Spain and see for yourself first hand what you are wishing this country turn into.  I think in a year or two you might change your views.  I wish you well.

posted by: GBear423 | March 5, 2015  2:06pm

GBear423

Politijoe wrote: “so, why would it be acceptable for government to be involve in manufacturing via OSHA or child labor but not healthcare?”

Small point-  there is a difference between regulating the market and forcing your citizens to buy a product. that is coercion. Its absolutely wrong. If people are making a living off of something being purchased, let it be on the merits and needs of the participants in the marketplace.

I feel strongly that Insurance NEEDS to be highly regulated. I do. I also strongly feel that there should be allowed and encouraged Health Savings Accounts for those that do not want to purchase insurance or wish to have High Deductible Plans. This is perfect for young and the healthy among us.  Over the years when one gets to the point of needing health care often, they have the HSAs available to pay for that care.

Just like the Stock Market is today, the medical field’s costs are HIGHLY inflated.  Absurdly so. I think we need to have the apocalypse that Mr Potter writes about so we can “normalize” this bloated mess and get it to where a median income family can actually not fear getting sick, and our town budgets for education benefits packages are not breaking our backs.

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