Obamacare continues to show success and irony

As reported by Kent Hoover of The Business Journal, an April 2014 Gallup Poll indicates the rate of those without healthcare insurance has now fallen to 13.4%. The Gallup Poll notes this is the lowest rate since 2008, when they first started tracking the issue. Many know that the public exchanges have signed up over 8 million consumers, but what many don’t know, including some reporters, is the expansion of Medicaid has added over 3 million covered individuals. Plus, what very few know, is that the pre-2014 Obamacare changes included a provision to allow parents to continue their adult children until age 26, irrespective of whether they are attending college. This pre-2014 change added 3 million people.

When you tally all of those numbers together, you get over 14 million additional covered individuals. There has been a lot of naysaying about the complex and imperfect law, fueled in a huge way by the poor rollout of the exchanges. But, that ship was righted and now people have signed up and are using the coverage. The naysayers have also noted the early sign-ups were older, higher costing medical consumers. Yet, the late push to get folks enrolled has improved the number of younger folks, to the extent that most insurers are feeling better about their risk profile. It still needs to be measured on a case by case basis, but this is encouraging. Also, the Congressional Budget Office is so enthralled with the better demographics, they reduced their cost estimates by $104 Billion over the next 10 years.

But, two final articles should be noted. First, about two weeks ago, Benefits Pro and Bloomberg News both reported that bond investors like Invesco, Credit Suisse, and Charles Schwab are looking favorably at the dampening effect on medical inflation that Obamacare is doing which is improving the outlook on US Treasury bonds. Second, today a study out of Massachusetts where Romneycare went into place several years ago, has indicated that mortality experience has improved for those who have been insured. In other words, the doctors, who analyzed the data, said it shows that if you have healthcare coverage, you will live longer, on average. Obamacare was patterned after Romneycare, so this is very telling.

On the flip side, there are still 24 states who need to complete the Obamacare package by expanding Medicaid. These states rank consistently in the bottom third of states on the quality of healthcare for its population by The Commonwealth Fund, who tracks healthcare data by state. They have shown, as has RAND Corporation and the Economic Policy Institute, that expanding Medicaid will help millions more people, help the rural hospitals in those states who are struggling and help the economies in the states.

As a retired benefits consultant, former actuary and former Director of Compensation and Benefits for a Fortune 500 company, I know Obamacare is not perfect, but I also know that there has been a mountainous effort to discredit it with true and untrue statements about its shortcomings. We need to keep Obamacare and embrace the changes it has made both before 2014 and in this year. We should also look to find ways to improve it. To replace it would be ill-advised and hurt many. Expanding Medicaid in those remaining 24 states would be the first change that would help.

And, the folks who are shouting the loudest should do some homework and read recent history that shows the Tea Party leadership strongly supported Romneycare for the whole country, including the mandate requiring insurance, before Obamacare was patterned after it and Mitt Romney ran for president. Once that occurred, Romneycare’s most strident supporter and de facto Tea Party leader, Senator Jim DeMint, said both Romneycare and Obamacare are unconstitutional. Isn’t it ironic that the idea the Tea Party favored then and now hate, actually is showing success? For people who do not believe this change in posture, they should Google “Jim DeMint and Romneycare” and read as much as they care to.

 

 

2 thoughts on “Obamacare continues to show success and irony

  1. Note to Readers: A key question on the exchange success is the percentage of enrollees paying premiums. A low estimate had been released by GOP lawmakers based on April 15 data which has proven to be incorrect when looking at the numbers in May. Per the attached Benefits Pro article, three major insurers (Aetna, Health Care Service Corp and WellPoint) will be testifying tomorrow the premium payers range from low to mid 80% to 90%.

    http://www.benefitspro.com/2014/05/06/insurers-say-most-ppaca-customers-paying-premiums?eNL=536911a0160ba09817db15f2&utm_source=BenefitsProDaily&utm_medium=eNL&utm_campaign=BenefitsPro_eNLs&_LID=163749812

    • Note to Readers: There are some additional articles circulating about a provision of Obamacare that has played out quite nicely. There is a feature that went into effect in 2010 that insurance companies could not have excessive profits on the premiums charged. For the individual and small market, the acceptable percentage of premiums on claims paid (called the Medical Loss Ratio) is 80%. For the larger plan market, the acceptable MLR is 85%. From these margins (100% minus MLR), an insurance company would subtract its sales and administrative expenses to determine its profit. In 2011 and 2012 refunds were made to consumers for excessive profits. Coupling this with finer pricing for 2012, the article notes consumers have benefitted by this requirement to the tune of $3 Billion.

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