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A Month in to Healthcare.gov, Real-Life Winners and Losers

Today marks one month since the disastrous start of Healthcare.gov, and we take a look at whose winning and losing in real life because of it.

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(©iStock.com/mbbirdy)

Today marks one month since the disastrous start of Healthcare.gov, the seriously impaired federal health insurance marketplace.

And what a month it’s been. For the first 16 days, a federal government shutdown largely deflected attention from the website’s problems. But since then, three congressional hearings have been held — and more are planned. Political pundits are anointing winners and losers (mostly losers) and trying to predict how the fallout could affect congressional elections next year.

I’m more interested in real-life winners and losers, people whose lives will be changed for better or worse because of the Affordable Care Act.

Clearly, if the website problems persist for much longer and people are unable to sign up for coverage, the list of losers will grow longer by the week. Consumers will lose because they won’t be able to enroll in health plans. Insurers will lose because they will have far fewer customers than anticipated. Hospitals will lose because the law cuts back their reimbursement for care they give to the uninsured. And on and on.

But for the moment, let’s assume some — or most — of those problems will be fixed by the Nov. 30 date promised by the Obama administration.

Winners

On a very obvious level, winners include young adults who can now remain on their parents health plans until age 26.

They include consumers with medical ailments who have been denied health insurance because of pre-existing conditions.

They include residents of states that opted to expand their Medicaid programs for the poor to cover those with incomes of up to 138 percent of the federal poverty level ($15,856 for an individual and $32,499 for a family of four).

Losers

By contrast, losers include those with lower incomes who live in states that decided not to expand their Medicaid programs. The Daily Briefing run by the consulting firm The Advisory Board Co. had a smart look this summer at which states will have the most uninsured residents in 2016. Being uninsured means you’re losing out.

Also sure losers are undocumented immigrants, who are ineligible for benefits or subsidies under the act.

And for now, at least, small businesses lose out because of the Obama administration’s ongoing delays launching a health insurance marketplace for small businesses. (Healthcare.gov, by contrast, is an insurance marketplace for individual consumers.)

Too Soon to Say

Another group that many commentators count as losers are the hundreds of thousands of consumers who have received cancellation notices from their individual health insurance companies because their policies don’t meet criteria set forth in the Affordable Care Act.

I hesitate to call all of them losers because some of them will be eligible for subsidies from the federal government to offset the cost of their new health insurance, and others will pay less in the new marketplace for better coverage. To be sure, some people clearly will lose out because they will pay more for their coverage — and their benefits won’t be all that much better to offset it.

What Others Say

The New Yorker’s Ryan Lizza had an interesting piece this week in which he spoke to economist Jon Gruber, who broke down winners and losers this way:

About eighty per cent of Americans are more or less left alone by the health-care act—largely people who have health insurance through their employers. About fourteen per cent of Americans are clear winners: they are currently uninsured and will have access to an affordable insurance policy under the A.C.A.

But much of the current controversy involves the six per cent of Americans who buy their own health care on the individual market, which the A.C.A. has dramatically reformed. Gruber argued that half of these people (three per cent of all Americans) will have little change to their polices. “They have to buy new plans, but they will be pretty similar to what they had before,” he said. “It will essentially be relabeling.”

The other half, however, also three per cent of the population, will have to buy a new product that complies with the A.C.A.’s more stringent requirements for individual plans. A significant portion of these roughly nine million Americans will be forced to buy a new insurance policy with higher premiums than they currently pay.

Economist Justin Wolfers tweeted the previous few paragraphs as a chart:

I posed this question to several smart folks I know — journalists, scholars, think-tank folks — and this what they said.

Boston University health economist Austin Frakt, who blogs at The Incidental Economist (a must-read), said he breaks down winners and losers into short-term, mid-term and long term.

“Short term there are no winners,” Frakt wrote, mostly because of the problems with the rollout. Even if the website issues are fixed by the end of this month, as promised, it will still be hard to get consumers signed up by Dec. 15 for coverage that begins on the first of the new year.

Looking ahead, Frakt wrote:

Medium term (next year, more or less): Providers and would-be Medicaid beneficiaries in non-expansion states are losers. Winners are those who finally get coverage (let’s assume the exchanges function by or soon after the new year). Entities that had to scramble and make sub-optimal decisions due to late-functioning exchanges lose. Same for people who were impatient and jumped at bad deals.

Still, this will be an uncertain, transition period. There may be insurers that opt not to re-enter the market next year. There may be exchanges that look unstable. I would expect some will be near failure, if not fail. All the obvious entities in those states will be losers, unless something can be done.

Big winners are researchers and those who might consume their work. We will learn a lot about exchanges. This is good for the future of health policy.

Long term (well beyond next year): I expect more states to expand Medicaid, bringing the obvious winners. I expect most exchanges to function, and that’s a big win for residents of those states. I expect Congress to continue to not be able to sensibly deal with failing exchanges and other glitches in the law, so there will be losers.

On the whole, I think the law will prove to be successful, and I consider that a win for America. If only we could make sensible mid-course corrections we’d all be winners.

Cost control will remain an issue. If we don’t make progress there, we’ll all be losers in the very long term. But we may have a decade before that really binds.

Dr. Scott Gottlieb, a resident fellow at the American Enterprise Institute and former FDA official, suggested many of the same winners and losers as I identified above.

Other winners include older, sicker patients who do not have employer-provided health insurance, as well as lower-income younger families who earn between $40,000 and $60,000 a year, because they will qualify for subsidies that will lower their costs.

Among the losers: Those who are young and healthy, who will pay more for coverage than they did before. Families who earn more than $60,000 face high premiums even with subsidies. “Also upper income healthy people lose big. They’re forced to buy a pricier policy than they probably want or need with no benefit of subsidies.”

The biggest losers (I agree) are those who earn less than the federal poverty level and who live in states that did not expand their Medicaid programs. When the Affordable Care Act passed in 2010, Congress envisioned that every state would expand Medicaid and it did not set aside money to provide premium subsidies for those patients in the health insurance exchanges. So they will neither receive Medicaid nor help paying their premiums.

Ironically, in the same states, federal subsidies are available for those who earn more than the poverty level. “Instead of getting Medicaid, they now get Obamacare with full subsidy. If they are young, a bronze plan could be very cheap,” Gottlieb wrote. Although their out-of-pocket costs will be higher than under Medicaid, “they’ll get a better policy with a real network that while skinny, will surely beat Medicaid.”

Dan Diamond, managing editor of the Advisory Board’s Daily Briefing, told me he thought it was too early to pick winners and losers based on the current website problems. But if they hold he said:

Insurers MAY lose — they may get fewer new customers in year one than expected, despite making investments in IT systems, acceding to market reforms, and other perceived sacrifices.

Hospitals and doctors MAY lose, if more folks stay uninsured and they have to carry more bad debt.

On the flip side, debt-collection agencies MIGHT win!

But would that be a win for America?

“On a very obvious level, winners include young adults who can now remain on their parents health plans until age 26.”

This was already the case, my son turned 26 recently, up until then he had received coverage under my name.

Joyce Jenkins

Nov. 1, 2013, 1:57 p.m.

You say that some will pay less in the new marketplace for better coverage. That is a big “SOME.” The truth is many more will pay a lot more. These plans have zero information regarding hospitals and doctors participating. You are going in blind. And daily you read about hospitals that won’t participate including doctors that are opting out.
The country, American people and those of us who pay taxes will be the biggest losers as this cost of this legislation will have a detrimental effect on our economy. But then isn’t that the goal. The employer mandate was extended for a year to limit the public from observing how many people will be dumped when that happens around election time. Imagine the fraud that will take place as a result.

The end game is government control over our lives making many dependent on the government ceding much power. Combine that with the systematic forced retirement of generals (don’t agree w/Obama) we will be helpless. This is called the fundamental change of American delivered as promised.
Coverage for the uninsured could have been accomplished in a much different way and at a much lower cost.

Mr and Mrs. Bailey

Nov. 1, 2013, 2:11 p.m.

“The New Yorker’s Ryan Lizza had an interesting piece this week in which he spoke to economist Jon Gruber, who broke down winners and losers this way:  About eighty per cent of Americans are more or less left alone by the health-care act—largely people who have health insurance through their employers.”

WRONG.  Husband’s “retiree insurance” through his company that he worked for, for over 30 years, is now going to cost us $150 more a month!  And they dropped vision for wife.

Company said it is because of “new health care laws enacted”.

One very big positive with Obamacare is that seniors with medications are paying less. Pre-Obamacare, Medicare Part D only allowed 30-day prescription purchases. Now with the Obamacare changes, seniors are allowed 90-day prescription purchases, which are priced considerably lower per month. Uncle Sam also pays less, too, so taxpayers are seeing a savings. My grandmother is now saving more than $100 per month in her medicines per month, thanks to this improvement brought by Obamacare.

The people who win are those with existing conditions and those who are subsidized one way or another. Those who lose are those who have to pay more in order to pay for that, and the taxpayers who will have to bail the whole thing out in the near future.

Why would the writers of this piece include “journalists” in their group of “smart folks”?  Seriously. 

Have you been impressed with the “media” coverage of the program?  Any more insights from this coverage than you, yourself, might have from watching CSPAN or reading the NYT and WSJ and the BBC website, perhaps?

Most media people turn out not to be journalists, and very few “media” organizations have any.

Carol Achtman

Nov. 1, 2013, 5:09 p.m.

Those ” with lower incomes who live in states that decided not to expand their Medicaid programs” are no worse off than they were before.

Arent Medicare recipients ‘losers’ because Medicare reimbursements are taking a big clipping to pay for Obamacare?

With the expansion of the risk pool to include those people with preexisting conditions whom can not afford or are denied coverage, it is not unexpected that some costs might go up. Over the years the risk pool has been sliced and diced so that every little sub group can find some policy that will cover what they perceive as necessary for themselves. Of course this perception quickly changes after a heart attack or a biopsy that comes back positive. I have read people complain about having to pay for maternity coverage they don’t need.  I ask those people to ask their mother or sisters. Recently I saw a comment about a canceled policy that looked very good, only it had no “out of pocket max”. Any serious illness such as heart surgery, cancer treatment, organ transplant, major auto accident, birth of child with congenital defects etc. can run into the $100,000’s where deductible and co-payments would easily exceed the “max out of pocket” for the year.
One good thing about any sort of insurance is feeling you will not face bankruptcy if some unexpected events happen

The whole USA will win if it gets parallel public and private health systems up and running as we have had in Australia for over 30 years. The two systems compliment each other. The Public does most of the teaching with University links, and the private takes the bulk of the run of the mill stuff out of the always stretched public system plus cosmetic surgery. Those insured get their treatment more quickly and can choose their doctor. But everybody gets excellent treatment eventually. I’ve worked in this system for 30 years as an anesthesiologist and I haven’t met any Australians who don’t like it.

That 80% figure will be dropping as employers begin to fire full time employees and re-hire part time workers, to avoid having to provide insurance programs that will become too costly. The savings will be well worth the splitting up of firms into smaller companies, operating under the same roof. Filling all new positions with part time workers in preparation for making future policy changes, and using labor force providers will be typical. Unions will not be able to protect part timers. That equates to savings for the employer.
It has already been predicted by political commentators that a bill will be introduced to close these loop-holes to prevent employers from using these tactics as a means to circumvent Obamacare. It has been typical for small business owners that have a growing company to come to the point where they must decide whether to make a financial commitment to expansion. Now, it will be deciding how they can start another firm to support the first and therefor avoid the 50 employee threshold that will require providing insurance. Legislation will be like trying to cover all the holes in a sieve. Can’t be done.

Obamacare is going to hurt society, not help it. It does nothing to solve the high costs of medical care. It will be the cause of on-going expense that will be paid by the very people it was touted to help. We should be wondering why the politicians who support this debacle are doing it. Will they divulge how much money they received from the insurance industry?

leroy hawkins

Nov. 1, 2013, 10:43 p.m.

I’m just over 136% of povert level. I can’t afford the co-pay and the montly drug regimen.  Penn. opted out and did not expand medicare. I will pay penalty first year and save up for next year and hope things change

We’re all losers.  Obamacare, its ameliorative qualities notwithstanding, will not address the primary problems of our so-called health care system: cost, systemic fragmentation, profit-driven payment system.  Australia can continue to be happy with their private-public model, we need expanded Medicare for all, or some variant thereof, paid with a progressive taxing scheme on individuals and business.  Bottom line: health care is not a business, it’s a human right.

Are young, healthy people really “losers” just because they’re paying more for coverage? “Young, healthy” people still have accidents, still get infections, still need check-ups, birth control, etcetera.

Losers include all of those whose doctors have discontinued accepting any insurance (as a first-step to avoid having to deal with the ACA mess), have quit practicing and/or have joined ‘concierge’ practices…which charge patients an annual fee that, in Florida, averages $1,500-2,000 annual to ‘join.’

I personally know of seven (count ‘em, **7**, as the old marquees over strip joints used to blast out) physicians in the Fort Lauderdale/Boca Raton area who have stopped ‘accepting’ any insurance as a direct result of the ACA.  This is seemingly a quick ad hoc ‘safeguard’ against having to accept Medicare or Medicaid.

My previous two primary physicians have joined concierge practices. The issue with concierge medicine is that, in addition to the patients’ annual fees, all other costs are higher as the physicians are free from ‘insurance industry-negotiated’ fees. 

Medicare patients are especially suffering.  I have a friend whose physical therapy (necessary to mitigate a crippling condition) has been slashed by 45% since June as a result of the ACA.  The result is that the previous annual allowance for 70 sessions of physical therapy has been slashed to fewer than one per week.  Other budget cuts are spinning down the conveyor belt for Medicare recipients.  Also, Medicare does not reimburse any out-of-pocket fees paid to physicians who don’t participate in the Medicare program.

I lived and worked in London for a bank in The City and none of the management used the lauded U.K. national medical care; they paid for it with taxes but used only private physicians and private hospitals.

If we’re LUCKY, the ACA unintended consequences will yield the U.K. bifurcated medical system wherein the affluent (or thrifty and prudent) will have access to top-quality PRIVATE physicians and hospital care.  If we’re UNLUCKY, we’ll lose even that right and will be stuck with only one option…the residue of whatever is left over.

For years I bought only major medical (catastrophic) insurance and self-insured for all the basic things.  I was a non-smoker, non-drinker and healthy thus my premiums were titrated as I was deemed, actuarially-speaking, of lower risk for some of the usual medical crises.  That is, I was rewarded, financially, for having a perceived (and actual) healthy lifestyle and habits.  And I made my own risk/benefit analysis when buying insurance just I made any other risk/benefit financial calculations.

The ACA, which I’m happy to let be nicknamed Obama,- or Pelosi- or Demo-care for the step-parents who shoved this disaster onto American citizens through a fraudulent advertising campaign that didn’t even hesitate at outright lies to the American public, but I digress, prevents people from being financially rewarded for healthy personal habits, lifestyle and other risk-related variables.  I am a registered Independent who vigorously disagrees with the Federal government’s presumption that it knows what I value and need more than I do and with the penalty that I will pay, in increased insurance premiums, for all the people who live more riskily or capriciously than I do or my family do.  As an economic participant, my self-interest is sacrificed to the whims of others who have no concomitant legal, or financial, requirement to, at least, attempt to mitigate their own health risks.  For the first time in my life, the fact that I do not smoke, will not yield a lower health “insurance” premium, nor will the heavy-smoking, heavy-drinking, malnourished pay a higher premium for their lifestyles or choices.  That’s just counter to any rational economic system.

I peer thru smoke of crypto-logic magicians heralding current solutions of yard sale scrap. They’ve picked for us to drink a wine of rotten fruit; we taste their inbred designed failure. A bitter tithe for which they came, an iron hand in which to grab all they want and all they can. I hear the vacuous tube from which they feed; a slurping all consuming sonic boom, like the thumping of rusted hearts. Their bald tires slowly leaking shame fan the fires they ignite. They thru prostitutes throw cash upon flame to hear more flaming rock to throw. Reason trampled under boot, but fruit must die before seed takes root…. -amyq

http://www.facebook.com/amyq.band

How does anyone know what physicians and hospitals will accept certain insurance plans ? How will they know if their medications are covered and if they are how much it will be out of pocket ? What will visits to the doctor’s office cost out of pocket in copays ?

I would add to the Losers Column those who are already unable to avail themselves of the protected employer-sponsored group health plans because, well, uh, they are among the double-digit unemployed.

So the “Obamacare” bait-and-switch game will FIRST hurt those who are likely least able to absorb the premium sticker shock because they aren’t employed or eligible for what economists and policy-wonks have long considered among the best of “employee benefits”—participation in group health insurance that is, even better, subsidized by the employer.

To put the heaviest burden on those who already pay a stunningly higher premium because they aren’t members of insurance pools is, to me, the cruelest of Macchiavellian moves.  This administration has cut ‘deals’ for all kinds of groups with deep-pocket lobbyists and unions on their behalf and ‘leans’ the heaviest on the group that is LEAST able to buy access to Obama or any representation on their behalf.

The only ‘good news’ is that this group will be hugely augmented as more and more employers stop offering any health care group plans so, at least, over time, the numbers of ACA-injured will grow and, just maybe, will perform due diligence before they vote again.

As Obama has taught us, any president can float off infinite numbers of Executive Orders so possibly the next president will undo the unjustice of the “Obamacare” coup.

Very surprised no one has mentioned the fact that the data used for this “pie chart” was obtained from Mitt Romney’s former statistical adviser.  No other statistical resources were used.  Disappointed U of M was not scientifically ethical with the release of this data, but their one-source figures utilized to comprise their pie chart certainly defies the meaning of ethical research.  Hope grant money was not utilized for this so-called “research.”

I am switching to a concierge practice at the beginning of the year and dropping all insurance. My current plan had more than doubled since 0-blamercare passed in the middle of the night in March 2010. The policy is more than my house payment now. The IRS can only collect fines from your tax refund. I own my own business and never get a refund so I won’t be paying any fines either. I have checked it out and this is one time the IRS can’t come after you. Read the law.

I voted for Obama twice, for the record. I’ve never been enthusiastic about the ACA. It did nothing to address the artificial and capricious costs of medical care in the US, and it’s an attempt to fix a patchwork system that can’t really be fixed. A person with a $5,000 deductible plan doesn’t really have ongoing, proactive care. That person chose that plan to get the lowest premiums, and likely is unable to put $500 aside to cover deductibles, much less $5,000. Most “non-profit” hospitals that once would carry a balance for one year, allowing the patient to pay the balance down, now refers struggling patients to private finance companies.

I agree, Alex.  The ACA did/does nothing to improve medical care in this country.  Worse, all large interested parties (e.g., unions) have negotiated exemptions and, let’s be honest, favorable treatment.
Obama wants a Canadian system.  I have friends in Canada who come to the U.S. for ‘anything serious’ because it’s nearly impossible to see a specialist there in any timely manner, there being a severe shortage.  Worse, there are no private doctors, or hospitals, in Canada so, unlike the wealthy in the U.K. who can pay more for ‘better’ treatment, the Canadians don’t have that option.

But what most horrifies me about “Obamacare” is that it’s an experiment being perpetrated on those LEAST able to protect themselves;  those who aren’t part of employer-subsidized health care, those who cannot benefit from ‘group plan’ economies of scale.  That is the people who are ALREADY paying the highest insurance premiums, for ANY given level of benefits, are being ‘cancelled’ by their insurers and forced to pay significantly more!  That is so outrageously unconscionable that I cannot understand how the elected representatives who voted for the act…‘unread’ no less, though these reps are usually attorneys who would never a client to sign a contract unread…should all be voted out of office for breach of promise and implied breach of contract with their constituents. 

Obama, in flat out lying about the consequences of “Obamacare” must have decided, a la Jack Nicholson in Top Gun, that we the citizens of this country “cannot handle the truth” and that it’s acceptable to lie at the cost of millions of Americans.  I can afford medical care, I can even afford to travel abroad for good care if that becomes an intelligent option, so I don’t a personal dog in this race.  But I remain stunned at the cynicism of the Obama administration and its unhesitating decision to just lie…to just shove a bill through, unread, no matter how much damage it does to huge numbers of innocent people.  The backlash will be interesting; maybe people will take their country back and reserve, for the themselves, the right to make their own economic decisions.

Good point Lisa!  Problem is there are so many uninformed and brainwashed voters who blindly follow their party’s pied piper.  And trying to find the actual facts and truth is becoming harder and harder.  For all the info that I can find,  it looks like, the start up of the Obamacare health site has, so far,  cost taxpayers 13 million dollars for EVERY uninsured American.  If this is true, does this make sense?  .

I went to my cardiologist recently and there were signs posted everywhere that United Healthcare Medicare supplemental plans have significantly reduced their doctor network and that they were no longer on it. With fewer doctors in networks,  the wait for appointments and care will be longer. 

I am lucky to have continued my employer insurance into retirement (premiums taken out of pension)  but I’m afraid of the changes and the increased costs that may happen under Obamacare, especially if the employer dumps our retiree health plans into the exchanges.

Only having seen a doctor 3 times this year, I could have paid the “inflated” charges billed to insurance myself and it would have been less than what my insurance premiums,  co pays, and deductibles are.  Some doctors and clinics no longer accept insurance but are charging less for services.

I would like to think positive, but I just don’t see a good outcome for a lot of us in the middle class.