Wednesday, August 19, 2015

A tough progressive critique of the ACA

Over at The Incidental Economist, I have a review of IBD reporter Jed Graham's e-book analyzing flaws in the ACA and proposing a package of fixes. Here's the opening*:
Those who have closely followed the drama of Affordable Care Act implementation as it's unfolded in the media over the past two years may be familiar with the sharp criticisms of Jed Graham, a reporter at Investor's Business Daily. These include a list of cuts to work hours and jobs prompted by the employer mandate, and spotlights on the sky-high deductibles taken on by the approximately one fifth of ACA private plan buyers who chose the lowest tier bronze plans.

Given the title of Graham's e-book assessing the law, ObamaCare is a Great Mess, a sometime reader of Graham's articles might assume that he's one of the ACA's many implacable ideological opponents. That would be to ignore the subtitle, A View of the Affordable Care Act Without Partisan Blinders & How to Fix It, as well as its substantive criticisms and recommendations. Graham identifies the law's shortcomings from an essentially progressive perspective, highlighting what he presents as the regressive impact of its mandates and  the limited affordability of its offerings for many buyers.  "The heart of the ACA is basically sound," he writes. "The goal of reform should be to unclog the arteries and let the heart do its job."
Graham's proposed fixes are well worth considering (well, some of them, in my view), and there's a potential venue for trying them out (or variants that could be cast as revenue-neutral): the ACA's innovation waivers inviting states to submit alternative schemes, starting in 2017 that meet the ACA's standards for affordability and coverage at comparable cost.  The book is also a useful antidote to the triumphalism that's taken hold of many supporters since the King v. Burwell nightmare went away.

* More or less: these paragraphs were edited down a bit for TIE.


  1. Thanks for your thoughtful review at TIE.
    The Urban League proposal looks better than ever now. As a devoted Dean Baker fan (see his Beat the Press blog), I am a great foe of quoting federal spending in 10-year projections. A half trillion dollars over 10 years does sound awful. But $45 billion a year -- which is the same spending -- is relatively small potatoes compared to health spending overall.
    As for tinkering with the age ratios -- this has been a problem in the ACA since inception. I personally see nothing wrong if the ACA enrollees are mostly old and sick. They are the ones who need health insurance the most! The need to attract young people is only driven by the decision to involve private insurers. The private insurers do need young people to hold premiums down.
    My alternative would be let the ACA be dominated by old and sick policyholders, and make sure that all insureds at all incomes would have a 9 or 10 per cent income cap. Let the subsidies fall where they may.
    Or else, drop the age of Medicare to 55, which is what I really want.

  2. Your review in TIE was excellent. The landscape for older ACA enrollees is quite wild. At my agency today I quoted two cases for 63 year olds. One of them made $28,000, and his premium after subsidies was $150 a month. The other had a larger income, was a smoker, and her premium for the same plan was $850 a month.

    The subsidy cutoff is stupid, and would not cost that much money to fix. The discrimination against smokers feels a little like east coast educated liberal snobbery toward working stiffs, but maybe the insurers insisted on it. I do not know.