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Dramatic Obamacare Breakup Enters Ugly, Expensive Phase

September 1, 2016

Consumer Power Report #516

I’ve witnessed some bad breakups among my Millennial peers, but the Obamacare breakup beats them all. You can fight. You can bite. You can DTR--that’s “define the relationship,” Dad--but sooner or later, lovers’ quarrels that can’t be resolved must come to an end. Once that determination is made, a clean break is best.

Ask your sister. Ask your friend’s sister (unless it is she you’re breaking up with). Ask anyone in your circles who would prefer not to hear for the next six to 18 months the drama about your emotionally driven choice to dive headlong into an insurance system--er, I mean romantic relationship--doomed to fail.

“Would you rather get one shot in the head or five in the chest and bleed to death?” A sound rhetorical question from Brad Pitt’s Moneyball (2011) character Billy Beane, training economist-turned-baseball scout Peter Brand (Jonah Hill) how to break the news to a professional ball player that he has been traded.

The same question could be asked of every American patient, doctor, insurer, elected official, and appointed bureaucrat pining for the brave new world of health care promised by the Patient Protection and Affordable Care Act (ACA), sealed with the kiss of death by President Barack Obama in 2010.

Unfortunately, starry-eyed ACA proponents insist on a bloody five in the chest, simultaneously prolonging and accelerating the inevitable Obamacare death spiral millions of Americans predicted.

The latest blow was an August 15 announcement by mega health insurer Aetna that in 2017 it would cease offering individual insurance plans in more than two-thirds of the 778 counties where the company currently participates in the Obamacare exchanges.

Aetna’s announcement followed competitor United Healthcare’s decision in April to exit by 2017 all but eight of the 34 state Obamacare exchanges in which it is active. Holding company UnitedHealth Group further cut this participation figure down to just three of 34 states.

To put these announcements in perspective: These are two of America’s largest health insurers, who arguably stood more to gain than any other party from ACA’s individual mandate, which coerces Americans to purchase health insurance by threatening them with a tax penalty.

This is the appropriate moment to picture Aetna and United Healthcare flooring their Volvos down Pennsylvania Avenue to toss the mink coat and gaudy ring Obama gave them halfway up the White House driveway. It’s ugly, costly, and can burn everyone around them. Yet, when mom and dad fight, the kids suffer most.

It is patients, not health insurers or Obama, who suffer a low blow each time ACA proves unstable and unsustainable. Participating insurers have practically developed a routine of hiking patient premiums by double-digit-percentages each year just to keep up with the cost of insuring disproportionately unhealthy pools of individuals. Insurers pass these costs on to patients, whose Obamacare plan premiums and deductibles have risen so high, many are cashing out of the insurance racket altogether, penalties be damned.

Ever shifting blame, some ACA proponents fault insurers instead of federal mandates for these perennial premium hikes. David Niklaus, business columnist at the St. Louis Post-Dispatch, criticized UnitedHealth Group in 2015 for having underestimated the costs of insuring innumerable unhealthy individuals. Meanwhile, unpredictably tardy husbands blame their wives when dinner, cooling on the table since six o’clock, is stone cold.

Not that insurers do not play a huge role in escalating the cost of health care; they do. But it makes little sense to blame insurers for failing to predict the future better than ACA’s central planners in Washington, DC, while worshiping the flawed central plan.

Los Angeles Times columnist Michael Hiltzik was essentially right to call “insurers’ withdrawals from ACA exchanges … a sign that the fundamental error in the ACA’s design was giving too much away to the insurance industry,” in an article published the same day Aetna broke up with Obamacare.

More precisely, though, ACA’s real flaw is trying to reform health care by empowering insurers and federal bureaucrats to make health care choices for patients and providers.

Hiltzik says the government should start “threatening to take some of that” power back. Escalating threats and mandates, however, is a foul substitute for health care reform--not to mention partnerships among free persons. Threats and mandates portend dysfunction.

ACA continues to fail as the relationship to govern all health care relationships. It’s time for a clean break.


Michael T. Hamilton (mhamilton@heartland.org) is The Heartland Institute’s research fellow for health care policy, author of the weekly Consumer Power Report, and managing editor of Health Care News, an online and print newspaper read by market-minded health care professionals, policy analysts, and 56 percent of state lawmakers.


IN THIS ISSUE:


SINGLE-PAYER HEALTH CARE PROPOSAL DIVIDES COLORADO’S LEFT

A universal health care proposal headed to Colorado ballots this fall has exposed some painful rifts among the state’s liberals.

The tension boiled over this week when the left-leaning activist group ProgressNow Colorado held a news conference to denounce the ColoradoCare measure. That drew angry shouts from some supporters of the measure, who showed up to deride ProgressNow as sell-outs.

ColoradoCare supporters held signs that crossed out ProgressNow and instead read, “Big Pharma Now.” Another sign asked, “Progress … Really?” And a third sign begged, “Stop Being Corporate Hacks.”

Amendment 69 would replace the current health care system with the nation’s first universal health care system. The $25 billion plan would eliminate private insurance in favor of a 10 percent “premium tax,” with the state covering health expenses. Employers would share employees’ costs.

The Durango Herald reports that Wednesday’s dueling news conferences had one calling the infighting a “civil war.”

Democratic state Sen. Irene Aguilar backs the measure and turned out Wednesday to oppose ProgressNow’s position.

“When organizations that are mislabeled as progressive choose to support the status quo, choose money influence over the lives of the 535 Coloradans estimated to die each year because of lack of access to health care, it makes the people angry and it makes me angry,” Aguilar said. ProgressNow’s executive director talked about the rift.

“You think this is easy for us? This is not easy. This is tough. Doing the right thing is tough,” Ian Silverii said.

His comments enraged Aguilar, who interrupted Silverii to say, “I am insulted that you implied that I’m spreading misinformation.”

Colorado’s top-ranking Democrats -- Gov. John Hickenlooper and U.S. Sen. Michael Bennet -- also oppose ColoradoCare. So does the abortion-rights group NARAL Pro-Choice Colorado, which fears the change could intrude on abortion rights because the state constitution bans the use of taxpayer dollars on an abortion. …

SOURCE: Associated Press


MAN TRIES AND TRIES, CANNOT DISCOVER PRICE OF AN MRI

Dan Mehlbrech thought he had a simple question: How much will it cost me to get a pelvic MRI?

The 63-year-old senior track and field competitor suffered a hernia while throwing a javelin this spring. His doctor told him an MRI was the only way to find out if he’d need surgery.

Finding the price turned into a nightmare, Mehlbrech said.

His insurance company told him to contact the hospital, which transferred him to its billing department, where he was told he needed to provide more information. He talked to three representatives that day and learned nothing. He ended up talking with his doctor again, only to be left with price estimates between $500 and $1,500 – perhaps even more. …

The simplest explanation hinges on the starting point: The price charged by a provider almost never matches the cost a patient or insurer pays.

There are three price tags attached to almost any health care service: The price charged by the provider, the confidentially negotiated price each insurance plan actually pays and the portion of that price the patient is left with once their insurance and deductibles are factored in.

For most patients, only the third price is an accurate reflection of what they’ll pay. …

SOURCE: John Hult, Argus Leader (South Dakota)


PINAL COUNTY, ARIZONA: THE COUNTY OBAMACARE FORGOT

When Aetna announced it was exiting insurance exchanges this week, it put a spotlight on this mostly rural county. No insurers -- zero -- are currently planning to sell Obamacare plans there this fall.

It isn’t entirely clear why insurers are fleeing Pinal County, which is not far from Phoenix. It had about an 18 percent poverty rate in 2014 -- higher than the roughly 15 percent for the country as a whole, but not a significant outlier. Median household income was around $50,250, according to the Census.

… But there aren’t a lot of doctors. The ratio of practitioners to people is roughly four times worse in Pinal County than the rest of the state.

“The reason why it’s empty is because nobody wants to be there,” one insurance industry source said of Pinal County. “The only thing a [regulator] can do is beg.” And begging on behalf of Obamacare can be politically problematic in a red state like Arizona, where Sen. John McCain is running for office on his active opposition to the law.

SOURCE: Dan Diamond, Politico


U.S. JUSTICE DEPARTMENT SUES MISSISSIPPI OVER MENTAL HEALTH CARE

The U.S. Justice Department sued Mississippi on Thursday, saying the state is violating the Americans With Disabilities Act by “unnecessarily and illegally” making mentally ill people go into state-run psychiatric hospitals.

The state has failed to provide community-based services that would enable people with mental illnesses to have meaningful interaction with friends and family and to make decisions about work and daily life, says the suit filed Thursday in U.S. District Court in Jackson. It also says life in an institution leads to stigma, isolation and learned helplessness.

“For far too long, Mississippi has failed people with mental illness, violating their civil rights by confining them in isolating institutions,” Attorney General Loretta Lynch said in a statement. “Our lawsuit seeks to end these injustices, and it sends a clear signal that we will continue to fight for the full rights and liberties of Americans with mental illness.”

Republican Gov. Phil Bryant called the lawsuit “another attempt by the federal government to dictate policy to the states through the courts.”

He said in a statement that Mississippi Attorney General Jim Hood, a Democrat, had been having discussions with the Justice Department about the state’s mental health system for some time.

“The current system of mental health in Mississippi has existed for many years, yet the DOJ has just now decided to take issue with it,” Bryant said. “For this reason, among others, we believe the lawsuit is without merit.”

Mississippi Department of Mental Health spokesman Adam Moore said he can’t comment on the lawsuit but the department runs nine crisis units that try to keep people close to home and help them avoid long-term institutionalization.

Mental health advocates have long pushed for community-based services in a state with a tight budget. Among them is Joy Hogge, executive director of the nonprofit Families as Allies.

“I am hopeful that this lawsuit will at last bring the kinds of services and support that people with mental illnesses need so they, just like the rest of us, can live in the community and be able to have productive and meaningful lives,” Hogge said in an interview Thursday.

The lawsuit says on a randomly chosen day in 2014, more than 55 percent of the 206 adults in the shorter-term units at the Mississippi State Hospital had previously been admitted at least twice, and more than 11 percent had previously been admitted more than 10 times. …

SOURCE: Emily Wagster Pettus, Associated Press

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Michael Hamilton writes and edits for the liberty-minded clients of Good Comma Editing, LLC, a freelance writing and editing company.
media@heartland.org @MikeFreeMarket