How prevalent is underinsurance among ACA beneficiaries?

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Big rain, small umbrella

In a New York Times op-ed Aaron Carroll, a physician and highly reliable assessor of data (his Bad Food Bible sifts expertly through a lot of bullshit in dietary research) makes two incontrovertible points about U.S. healthcare:

1. Americans are burdened with uniquely high out-of-pocket costs that induce us to forego need as well as unneeded care.

2. The ACA partly replicated this gaping flaw in our healthcare system, inflicting ridiculously high deductibles and out-of-pocket maximums on a significant number of marketplace enrollees.

But the argument includes what I regard as a slight (and common) distortion of emphasis in his overview of marketplace enrollees' high out-of-pocket costs: 

The average deductible on a silver-level plan on the A.C.A. exchanges rose to $4,500 in 2021. If people tried to buy plans with a lower premium, at a bronze level, the average deductible rose to more than $6,000. Granted, some cost-sharing reductions are available for those who make less than 250 percent of the federal poverty line, but even after accounting for those, the average deductible was more than $3,100 for silver plans.

A managed Medicaid bailout for repeal-and-delay Republicans

A week ago I suggested, in a kind of desperate good-Trump fantasy, that if Trump really wanted to fulfill his campaign promise to replace the ACA with "something beautiful," he could replace the ACA marketplace with a managed Medicaid buy-in for anyone who needed it.

Earlier this week, Michael Sparer, Chair of Columbia's Mailman School of Public Health, published in NEJM a somewhat akin proposal that could serve as both a basis for permanent compromise and a stopgap if we end up in "repeal-and-delay" limbo. Rather than creating a "fallback" public option from scratch, as President Obama and others have proposed,

A better idea, I believe, and one that could conceivably lead to a political compromise, is to rely on Medicaid managed-care plans to offer an exchange plan wherever they operate where there would otherwise be only one participating insurer. This strategy could work even if ACA premium subsidies for exchange enrollees were eliminated and replaced by some alternative version of tax credits or rebates.

That too might seem like a pipe dream, in that it requires constructive Republican action to keep people insured, not to mention expanding the Medicaid expansion. But maybe not! Austin Frakt's* reading of the political tea leaves suggests that some kind of stopgap staving off total collapse may become the new normal. Reacting to Senator Lamar Alexander's forecast that Republicans might need six years to forge an alternative that could overcome a filibuster, Frakt writes:

Writhing out of narrow networks in a medical seller's market

In a recent post, I voiced some unease about the "narrow networks" offered by a majority of plans on the ACA exchanges. According to a McKinsey study cited by the WSJ, 70% of silver plans are "ultranarrow" (offering access to five or fewer hospitals) or "narrow" (offering access to thirteen or fewer hospitals). Doctor rosters are similarly trimmed.  These networks reflect insurers' relative lack of pricing power versus providers.  As Ezra Klein highlights in a column spotlighting the missing link in U.S. healthcare reform, "It’s health-care providers -- not insurers -- who have too much power in the U.S. system."  That's because the U.S. is the only wealthy country in which government does not effectively set prices.

Insurers are thus retailing overly expensive care.  You can't blame them for trying to cut out the most expensive providers in our most-expensive-in-the-world market.  In that prior post, I highlighted one alternative that many employer-sponsored (or funded) plans provide:

The "I want the best" quality measure in healthcare

On The Incidental Economist, Bill Gardner rather wearily brushes off claims, based on personal experience, that the U.S. has "the best healthcare in the world." He outsources to Aaron Carroll the marshaling of evidence that "on most important measures, the US has poorer quality of care than comparable countries" and concentrates on a prior question: what do we mean by quality of care? He then offers a breakdown of quality measures which, for policy purposes, may be comprehensive, but which I think misses a dimension that may be in the minds of many who claim "best" status for the U.S. Here are Gardner's "dimensions of health quality*":

• The hotel experience. Some hospitals are nicer places to stay than others. This may seem trivial in the context of life and death, but any hospital manager will tell you that ‘hotel quality’ matters to patients.
• The relationship experience. Did the health care providers treat you with respect? Were they considerate of your religious beliefs? The well-educated readers of this blog may have difficulty imagining that they would not be well-treated by health care providers. But disrespect may be a primary consideration if you are poor, speak a language other than English, live outside the mainstream culture, or are mentally ill.
• The rightness of treatments. By the ‘right’ treatment, I mean the one that was most likely to benefit you.
• Safety. Were you harmed through error or neglect while you were in care?

In response, I posted this comment:

HHS guidelines for privatized Medicaid expansion

The Department of Health and Human Services issued a FAQ on Friday regarding its receptivity to state proposals, like the one floated by Arkansas, to use the federal funds for Medicaid expansion through the ACA to offer private insurance through the ACA exchanges to Medicaid-eligibles.

HHS points out that outside the ACA expansion, states already can use Medicaid funds to buy private coverage  (mostly through private group health plans) for Medicaid recipients, provided that the plans are deemed "cost effective" -- that is, "that Medicaid’s premium payment to private plans plus the cost of additional services and cost sharing assistance that would be required would be comparable to what it would otherwise pay for the same services."

The new departure would be using federal money to buy qualified health plans on the new ACA exchanges for those covered by the ACA's Medicaid expansion. It's important to note the context in which HHS will consider "demonstration projects" of this sort: it will do so to "inform policy for the State Innovation Waivers that start in 2017."  In 2017, states can apply to "pursue their own innovative strategies to ensure their residents have access to high quality, affordable health insurance" providing the proposed plan

Medicare for all, or Obamacare for seniors? Or both?

Many have noted that the Medicare reform plan included in Paul Ryan's 2012 budget, though sketchy in detail, looked a lot like Obamacare for seniors plus a public option -- the public option being traditional Medicare, which would compete with private plans on an ACA-like exchange.  Throughout the presidential campaign, Ryan emphasized that his plan would not affect current seniors, only kicking in for those under 55 when the plan was enacted.

This year, to meet the GOP target of balancing the federal budget within ten years, Ryan is reportedly planning to move the migration age up.

That possibility has led Avik Roy, the most vocal spox for conservative health reform ideas, to stop worrying, love the ACA, and envision its fusion with Ryancare:

There has been an important development since last year’s House budget: the reelection of President Obama. Obama’s victory means that Obamacare will be implemented, warts and all, making it politically impossible to repeal, even if Republicans are fortunate enough to retake Washington in 2017.

One big happy future family: Romneycare, Obamacare, Ryancare

On a second read of the Medicare reform plan outlined in Paul Ryan's 2013 budget, I was whipsawed by crosscurrents of irony.

I was going to lambaste the plan for its touching faith in the Competition Fairy, believed to shower her low cost/high quality beneficence on private insurance plans competing in a government-run and -financed marketplace. Then it occurred to me that the ode I was reading was virtually identical to the praises sung by Democrats for the prospective healthcare exchanges to be established by the Affordable Care Act. Indeed, the ode may have been composed in large part by a Democrat -- Ron Wyden, who coauthored a proposal with Ryan in December 2011 that Ryan's more recent plan resembles more than it departs from (notwithstanding important differences).  Here's part of the opening movement  of Ryan's Song -- emphasis (and repetition) in the original:

Are doctors more "defensive" than studies show?

Aaron Carroll takes a whack at the alleged myth that medical tort reform has the potential to significantly reduce healthcare costs. Citing two studies published in the September 2010 issue of Health Affairs, he reports findings from the first that our medical liability system accounts for only an estimated 2.4% of total U.S. healthcare costs (a nontrivial $55.6 billion), and from the second that tort reform would reduce costs by a mere one tenth of one percent.

Carroll originally published this post as a guest blogger for Ezra Klein, who has often cited similar findings -- as did Obama, in the bipartisan healthcare summit he called in February 2010.  Personally, I am deeply suspicious of the Republican passion for tort reform, medical and otherwise, which is part and parcel of their aversion to holding any industry accountable for any damages it causes.  Nonetheless, claims that the medical liability system has only a modest effect of doctors' behavior always arouses my skepticism.  This skepticism comes in large part from listening to my wife, a nurse-midwife at an inner city hospital, who is forever frustrated by the obstetricians' hair-trigger for Caesarian sections. Her colleagues are plainly strung taut by the constant threat of lawsuits; whenever anything goes wrong everyone anticipates a suit. I strongly suspect that the threat of liability affects caregivers' behavior in ways that do not show up in the research.  And I have questions about both of the studies Carroll cites, and about Carroll's presentation of them.

First, the two studies are to a certain extent at cross-purposes.  Carroll as noted above, reports that the first study [purchase required], led by Michelle M. Mello in a team including Atul Gawande, pegs the cost of our "medical liability system" at 2.4% of total healthcare costs and finds that the vast majority of that cost comes from the practice of defensive medicine.  Carrol then notes that the second study, led by J. William Thomas, pegs the potential savings from tort reform at just .1% of total costs.  But in the Mello study, defensive medicine costs and tort reform savings are presented as one and the same thing. The authors estimate of total, system-wide costs is based entirely on a series of studies by Kessler and McClellan conducted from 1984--1994. All the results, and the Mello authors' extrapolations from them, use those two terms interchangeably (my emphasis):

Kessler and McClellan examined the effect of tort reforms that directly reduce expected malpractice awards—such as caps on noneconomic damages—on Medicare hospital spending for acute myocardial infarction and ischemic heart disease from 1984 to 1990.⁷ The reforms lowered hospital spending by 5.3 percent for myocardial infarction and 9.0 percent for heart disease....

Subtleties of life expectancy, cont.

Today, Aaron Carroll joins Ryan Grim and Jonathan Chait in highlighting a subtlety in the calculation of the effect of increased longevity on social security costs. Ever-increasing longevity has been used to justify raising the retirement age in the Bowles-Simpson deficit reduction plan (to 69 by 2075 for full retirement).  The catch is this: life expectancy for those who reach age 65 has risen far more modestly than life expectancy from birth:

First, if you made it to 65, even back in 1950, you could expect to be on Social Security for 14 years... life expectancy for someone who lives to 65 and qualifies for these programs, hasn’t gone up as much, or as quickly, as people think.

The reason that Social Security has become more costly is not nearly as much that people are living longer on the program, as it is that many more people were born into the generation approaching 65. They aren’t getting more benefit individually; as a group there’s just more of them. When you argue that you want to raise the age at which they start to 68, instead of 65, you’re basicly giving them as many years on the program as a person who hit 65 in the mid 1970′s. That’s a pretty big change [i.e., we've been getting more years in recent decades?].

There's a further subtlety, though, that's been left out of this discussion. It's true that life expectancy before age 65 does not affect the total size of the benefit that retirees collect.  I presume, however, that it does affect the ratio of active workers to beneficiaries -- though I will note at the outset that that ratio has been remarkably stable since 1975, ranging from 3.2 to 3.4 in every year except 2009, when it dipped to 3.0. And I would guess that that dip occurred mainly because the number of employed workers dropped so precipitously in the Great Recession.