• To avoid failure, the Affordable Care Act must evolve

    By now, the potential consequences of too few young and healthy individuals participating in the new insurance marketplaces are well known. As Ross Douthat described,

    [T]he law can work only if people who don’t necessarily benefit immediately from its provisions decide to participate anyway. If they respond to higher premiums by either staying out or dropping out, then Obamacare will be permanently unstable: the dollar figures, both for insurers and the government, simply won’t add up.

    The participation of the young and healthy is supposed to be required, of course, by the individual mandate. But the mandate’s penalty is relatively modest and its enforcement mechanisms relatively weak, which means its power ultimately depends more on civic duty than on immediate self-interest.

    The law’s advocates have explicitly acknowledged this point. Explaining the case for the mandate last month, The Atlantic’s Matt O’Brien allowed that “a rational self-maximizer” might decide to pay the fine instead of buying costly coverage. But “real people,” he argued, “aren’t rational self-maximizers … We don’t like to feel like we’re doing the wrong thing. We like to follow the rules instead. Feel like we’re a good person.”

    That the viability of the new marketplaces rests on convincing people that it is their civic duty to purchase health insurance is a weak link. Though it’ll hold in many states, I expect it will break in some markets. There may be too many people in some states who believe or are led to believe that going uninsured is just fine.

    And, you know what? Provided it’s arrived at by honest means, I respect that choice. It’s not one I’d make for myself or my family at current health insurance prices, but I don’t think I should impose my view on others. It’s neither irrational nor immoral for others to judge current prices too high.

    Though I support the Affordable Care Act (ACA), I have a great deal of trouble with the idea that people must purchase insurance. Not only am I not convinced of arguments that they must, the law doesn’t strongly support it. Yes, there is an “individual mandate,” but it’s well known what that really means: if you don’t enroll in a plan meeting certain requirements, you must pay a tax penalty, unless you meet one of the hardship exemptions. (I have no moral qualms about the government’s constitutional role to tax in this manner.)

    Sure, you can call it a “mandate.” But it’s just a choice. Play or pay. Both are legal. Views differ on the extent to which each is moral or just. I choose to interpret them as both perfectly legitimate. Indeed, the whole setup is equivalent to a tax break for purchasers of insurance. No purchase, no tax break. Big whoop.

    And yet, within the community rating/guaranteed issue framework, the non-participation by younger and healthier people imposes a cost on others. Premiums will go up. Markets may fail. Within a few years, we will face the question of what should be done about that. The answer is almost in the law itself.

    ACA section 1332 establishes a new waiver program that allows the Secretaries of HHS and Treasury to waive certain provisions of the ACA in order to support state demonstrations. Section 1332 waivers — referred to in the law as “Waivers for State Innovation” — are available for plan years beginning on or after January 1, 2017. […]

    In order to qualify for a waiver, a state’s proposal must be able to demonstrate that resulting coverage will be at least as comprehensive as coverage through a state health insurance exchange. Benefits must be as generous as those provided by qualified health plans through an exchange, and premiums and cost sharing must make coverage at least as affordable as that provided under the ACA. Furthermore, the state’s plan must be budget-neutral and must assure that a comparable number of residents will be covered.

    This sounds promising, but I think a few states will balk at the idea that coverage must be at least as comprehensive as the ACA prescribes, with benefits at least as generous, etc. However, if some of these requirements were relaxed, many states that currently resist the ACA might be willing to implement a variant that is more broadly attractive to their residents.

    Would that be so bad? I don’t think so. After all, what’s adequate, affordable coverage is subjective. Reasonable people can differ. And the alternative to a less generous, lower premium design may very well be a dysfunctional market, which is clearly worse.

    Whether you believed it at the time of passage, reality may soon prove that the ACA is, in fact, too inflexible to meet the goals that motivated it. Universal access to adequate, affordable coverage (in some sense) best describes its chief aim. Though it’s still too early to tell for sure, I’m willing to bet that that aim cannot be achieved in some states unless the law evolves to permit them greater flexibility in design.

    @afrakt

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    • “That the viability of the new marketplaces rests on convincing people that it is their civic duty to purchase health insurance is a weak link.”

      I’d go further. Among the “burn your Obamacare card” crowd, some probably view it as their civic duty to subvert the law and reject insurance even if it were a net costly to them.

      Now that’s a small number of people. But there’s likely a much larger group who don’t want to destroy the law, but nevertheless don’t feel the pull of civic duty and will just make the financial calculation. “Buy your state-mandated insurance!” just doesn’t quite invoke the civic duty pull as, say, voting or refraining from theft do.

    • Ausin
      If folks can afford insurance, putting aside definition of affordability, you would green light a system in which folks would not be required to buy it. Okay so far.

      However, does the same system have a mechanism in place to prevent the newly found sick (read: $$$) from seeking redress from the same system they ignored?

      I live this stuff. At least 3-4x year, ex post, the atheist finds god in the foxhole: “why didnt i get insurance.” Again, I speak of those who could manage coverage. I see the real world consequences. They go broke or pay 10 cents on the dollar. Sucks for everyone.

      I am assuming you wish to trade off the costs of the rugged ones for the flexibility a soft mandate confers, yes? Overall, a better trade?

      Brad

      • The penalty ought to be set to cover the expected value of uncompensated, emergency (EMTALA) care plus the cost to the system of debt collection. I agree with the AEI proposal guys on this one. Moreover, there should be more teeth in enforcement of payment of the tax. It should be like any other tax. Evade it and you face the risk the full wrath of the IRS.

        Let me make this even clearer. I think the law should have been written to explicitly raise EVERYONE’s taxes by just this much. Then, if you buy coverage, you’re exempt from the tax.

        I also am not opposed to a late enrollment penalty or other ways of addressing adverse selection. The externalities should be addressed.

        • I think John Goodman has been discussing such a proposal for an extended length of time. In his proposal the default is Medicaid and the money to pay for it comes from the taxes not spent on todays health care tax deductions (tax credits).

          Those that think there are no alternative proposals on the table should view his. (Note he has multiple thoughts on what could be done in many different scenarios. He is also considered the father of HSA’s)

        • So, if you let everyone avoid insurance and pay a penalty or 10 percent of what they owe- who pays ultimately? The rest of us. And that is fair to us how? I am all for people having choices but if your choice is not to pay even when you can, then why should you not suffer the consequences? You bet the house, so to speak, and you lost. I I know you will pick up my tab there is no risk at all. I would be a fool to get insurance.

          Every single time I ask someone who believes that s/he should be free to choose if s/he is free to die/suffer on the ER steps for lack of funds, the answer is – silence. If you want to risk your life and/or injury, that is your choice but you are risking it with the money of the rest of us have.

          How brave indeed. How risky indeed.

          You want them to buy insurance? Tell them no treatment from ER or any other medical provider unless they have insurance and/or the funds to cover their care and/or all debt incurred is non-dischargeable in bankruptcy. Forever. Otherwise? Die. Suffer. Oh, they’ll sign up. But, to be honest, I am sick of this pseudo-libertarian garbage. Unless you are willing to die for your non-insurance belief, you are a fraud and a phony and I shouldn’t have to pay for you.

          And no, I don’t think (if I read all your other writings correctly) that you are of the mindset above, but when people I respect start repeating the “I should be free not to insure myself but you should have to pay for my care” argument, then I fear all is lost. (I am speaking only of those who can pay but choose not to do so; those who cannot should be given free care. I believe 100 percent in universal health care. Period. That this country does not have it is a moral crime against humanity. I would much prefer my taxes go to that than the war department.)

        • Austin, I agree with you. The idea of raising everyone’s taxes and then exempting those with insurance makes sense. In the wonky policy world that you and I live in. But what are the chances that this idea – a TAX INCREASE!! – could gain political support? I’d say – especially in a place like Kansas, where I live – approximately zero.

          I see a fundamental problem with generating support for rational sound policy ideas in the current political environment. In my experience in my state, research and data have nearly no sway. What we have is a POLITICAL problem, not a data/research/information problem. Forget testing interesting innovations that may have various effects. We can’t implement proven ideas with predictable positive outcomes.

          I don’t know the answer to this, other than hoping that someday “this too will pass.” But it’s the source of some of my biggest frustrations.

        • Why not set penalty at the expected value of insurance to a healthy person – the expected cost of insurance to a healthy person? The penalty that gets the average person to rationally purchase insurance. Maybe we’d add a little bit to the penalty because we’d like a larger fraction than the mean of the distribution to purchase insurance for reasons related to public health externalities.

          Anticipating a common argument, young people can’t just wait to purchase insurance till they get sick, because of limited open enrollment periods. Thus the value to healthy person is only zero if all forms of potential medical issue can wait 9 months before treatment.

          • Is a penalty actually needed if the insurance provided is really insurance rather than some contrived device that meets certain political needs?

            The rational person that has money generally purchases insurance if available. The person without money requires a subsidy whether or not he is rationale. Thus someone else is generally not paying for the uninsured unless the person can’t afford insurance in the first place.

            What happens if the rational person with assets doesn’t carry insurance? He is sued and loses. In the end he might pay substantially more for his care than the insurer would have paid. If that is the case, he is not a drain on the system rather he is a positive input though he might spend less on unneeded healthcare (moral hazard).

    • It is very easy to get a hardship exemption to the individual mandate. All you have to do is claim that it is against your religion to buy insurance. Bingo, no penalty.

      In fact, many conservative media outlets have been using this tactic to try to get young people to avoid buying insurance without having to pay the penalty.

    • I’d say that many young, healthy people recognize that even they could get an expensive disease; Lupus, leukemia, and Lou Gehrig’s disease to name three.

      The real problem is that young people have fewer assets to preserve, so waiting until they are eligible for Medicaid is not going to be the huge disruption that it would be for someone with equity in a house or other substantial assets. In fact, they will probably accumulate assets faster if they skip the health insurance in favor of a down payment.

      • @SAO: But will the quality of care be the same on Medicaid as if the young person had ACA qualified health insurance — especially for a serious illness requiring ongoing, lifetime care? My daughter began developing symptoms at age 20 and was diagnosed at age 21 with rheumatoid arthritis. No one in our extended family, going back at least to her great grandparents and all their descendants, has had this disease so far as we can determine. This is the very purpose of insurance: to protect against an unlikely but catastrophic event.

        • I wasn’t arguing that this was a great bet, but that it was a bet many young people would consider. In my 20s and 30s, during periods of underemployment, I occasionally went uninsured. I wasn’t happy about it, but I was less happy about the idea of hitting up my parents to cover my living costs. Many of my peers (college-educated, raised middle class) did the same thing. What drove people to uninterrupted coverage was children, planning or having them.

          As to your argument, realistically speaking, if the disease isn’t preventing someone from working, they can get employer coverage and if it is, then they are going to end up on Medicaid anyway.

      • “waiting until they are eligible for Medicaid is not going to be the huge disruption”

        I don’t think that many people are going to plan on medical bankruptcy as a means to get access to medicaid. First, bankruptcy would seriously jeopardize their economic plans for the remainder of their life. Second, they’d jeopardize their health and lives by not getting any curative treatments until their finances are decimated. ER care stabilizes only, but many curative treatments are most effective only if implemented early. (see cancer).

        “In fact, they will probably accumulate assets faster if they skip the health insurance in favor of a down payment.”

        Unless they get sick, at which point their savings & income are reduced to the point that they’re eligible for medicare. If people behaved like you suggest, no one would ever get insurance, because the expected value is always negative. On average, a person of any age accumulates assets slower with insurance than without it. (If the expected value were positive, then insurance companies would be unprofitable.) But humans DO purchase insurance. We see value in lower volatility even if that reduces our returns somewhat.

        So really, you’re saying that young people are going to behave in this crazy way that everyone else does not; a camouflaged version of the standard griping about “the problem young people today”, from an older person perched in their comfortable rocking chair.

    • Even if young people do participate, the Affordable Care Act is not so “affordable” for some groups.

      A couple in their late 50’s making over $62,000 has to pay over $15,000 a year for lousy Bronze insurance. And more if one of them smokes. And again that is under the optimistic pricing assumptions that insurers trotted out this year.

      The solution may not be punting this back to the states. New York and New Jersey and a few other states have had guaranteed issue for years and their insurance markets were awful.

      A better solution would be to keep expanding Medicare and a more federalized Medicaid, and raising national income taxes to do so. Ross Douthat does not like this but he hinted in an October column that it might be needed.

      • “Even if young people do participate, the Affordable Care Act is not so “affordable” for some groups.”

        Well, yes. But that’s because health care in the US is twice as expensive as anywhere else. Since we’re the richest, most in love with capitalism country in the world, maybe a 20% premium over other countries’ charges would be par for the course, but a factor of two is nuts.

        On the other hand, I think that 30-year olds getting charged 1/3 the cost for 60-year olds is a pretty good deal for 30 year olds, given that there are subsidies.

        “A better solution would be to keep expanding Medicare and a more federalized Medicaid, and raising national income taxes to do so.”

        I’d support that. Heck, just tack on a 20% (or whatever it takes) surcharge on everyone’s income tax, and declare that everyone is insured.

        But to get back on my favorite hobby-horse: I really think that the only way to make health care actually affordable is to do what Japan does: strictly regulate the amounts providers are allowed to charge for services, negotiate in bulk for drug purchases, and be very aggressive about pushing generics when possible. (Price controls is, of course, essentially what “single-payer” really means. But don’t tell the Republicans: they’ll all have heart attacks, increasing health care costs even more.)

    • According to the research of Elinor Ostrom, the presence of the “free-rider” is a fundamental problem for managing any commons. For the commons represented by the healthcare industry, a person who uses health care but decides not to pay for its availability is a “free-rider.” It may be that the free-rider problem for the healthcare industry will always be a problem when accessibility has been guaranteed for immediate health conditions, as a result EMTALA . This focus on immediate health conditions aggravates the over-all cost of our nation’s healthcare. The over-all cost of our nation’s healthcare is currently paralyzed since the availability and accessibility does not uniformly exist to each citizen for the coordination of their Basic Healthcare Needs with any Complex Healthcare Needs. I suggest that the free rider problem for managing the commons, represented by the healthcare industry, will not be resolved without equitably available and culturally accessible Primary Health Care, community by community. Furthermore, any financial tools to promote justly efficient and reliably effective healthcare for all citizens will be only marginally successful without a perception among most (i.e., 95%) citizens that Primary Health Care is important for them as necessary to achieve stable health in the future.

      Remember that our nation’s maternal mortality ratio has worsened in the last twenty years, all of the other developed nations of the world (total of 43) have improved. No economically viable financial strategy will solve this issue without equitably available and culturally accessible healthcare for each citizen, beginning with Primary Health Care. I propose that the research of Professor Ostrom should conceptually lead the way.

    • It’s nice to dream of what might be, but reality has a tendency to poke one in the eyes. The discussion having to do with the young signing onto the ACA has been broached many times on TIE. We have heard various viewpoints, but the fact remains, if the ACA is not adequately risk adjusted or adequate force is not used to force the young into the program the ACA is severely damaged.

      To those that believe the young will do the right thing and sign up, ask the young if they believe they will receive social security like the seniors do today. Invariably they will have severe doubts and then they will think about the ACA and ask will it be there when I am older? This is a system where force is the only way it can effectively work.

      The question then becomes does the population as a whole wish such force to be used. Look at what happened in the 60’s hen the middle class was hit with the mandatory draft.

    • Austin, you have made my day. For several years I have been saying that EMTALA should have been funded. If we are going to require hospitals to stabilize all patients, then we have to pay them to do so.

      I really like the idea of raising all taxes, and then offering an exemption for those who actually buy insurance.

      This would largely solve the employer mandate problem.

      Every single business firm would face a new 3% payroll tax. If the firm actually paid for its employees’ coverage, the tax goes away for them.

      For the cheapskate firms, the tax remains and the proceeds are directed toward safety net institutions.

      The same process could work for the self-employed.

      As you mentioned, John Goodman has been in favor of this for some time. His proposal is marred in my opinion by a mish mash of tax credits, but overall he is in the right direction.

      Thanks again for your blog, and for this solid solid insight.

      Bob Hertz, The Health Care Crusade

    • “the non-participation by younger and healthier people imposes a cost on others.”

      It is one thing to impose a cost on another through action, but through inaction? That takes us far from our Republic. If you don’t eat your broccoli then you are impacting interstate commerce because by not eating it you are decreasing the price of broccoli. That takes us back to the Supreme Court Cases under the FDR administration.

    • A couple of comments. First, it’s too bad Frakt didn’t design ACA. Sure, it’s true that politics helped make HCR a reality, but it’s also true that politics may make it a failure. Second, the decision to impose so much of the cost of (nearly) universal insurance coverage on the nearly old was both a political and policy mistake. [Disclosure: I’m nearly old.] If insurers can charge the nearly old three times what they charge the young because the nearly old are a greater risk, then why shouldn’t they be able to charge someone with cancer three times the premium, or five times, or ten times, since someone with cancer is at an even greater risk than the nearly old. Of course, in the group market such age discrimination doesn’t exist. Besides being bad policy, age based discrimination in the individual market, as allowed by ACA, jeopardizes political support among a large and growing segment of the population (as the nearly old continue to lose group insurance in growing numbers). Third, Frakt’s willingness to consider, to invite, changes to ACA is a welcome change. Not too long ago anybody expressing a desire to “relitigate” ACA was summarily dismissed, even on this web site. While I appreciate the frustration with ACA-opponent dead-enders, pretending that ACA can’t be improved is both unscientific and counter-productive,

      • I don’t actually think there was any design at the time that would have satisfied congressional Republicans. But I do think they are coming around to the fact that repeal won’t happen. We all have to live with the law now. Hence, we all ought to offer some flexibility in order to make it work for more people.

      • “Age discrimination”, or adjusting for the anticipated increased cost of older Americans DOES exist in the group market. Employees just don’t see it because most employers are not willing to take on the EEOC by using an age-based employee contribution scheme – as many employers already use for pricing life insurance and for imputing income taxes (using Table 1, Internal Revenue Code Section 79),

        Believe me, your insurance rates (or your experience if you are self insured) shows the disparity between me (age 61) and my daughter (age 25) to be 6:1, not 3:1.

    • “That the viability of the new marketplaces rests on convincing people that it is their civic duty to purchase health insurance is a weak link.”

      How about the concept that it is a good idea to have health insurance in case I get sick or injured?
      Most of the “young people” I meet realize that they need health insurance and now that they can get affordable insurance, they are happy.

      • Great! I think they should be provided all the relevant information and make their own decision. I still predict that many will not want to enroll in some states, but might if a different design were permitted.

    • “Though I support the Affordable Care Act (ACA), I have a great deal of trouble with the idea that people must purchase insurance. Not only am I not convinced of arguments to the contrary, the law doesn’t strongly support it.”

      If you were a swede would you say that you don’t think it’s fair to pay taxes because you’re not really sure you need the health insurance it provides? What’s with the sudden turn to the right Austin?

      • I don’t understand your comments. Long ago I wrote that paying the penalty is a perfectly fine, legal option in my view. Again, not what I’d choose for myself, but I respect others who feel that way.

    • It’s almost as if you forgot that the point of mandating comprehensive health insurance is to assure that sick people don’t pay a lot of money. You seem so caught up in the economics and concern trolling of people like Douthat that you’ve forgotten the ethical dimension of the whole enterprise in the first place.

    • I wonder if the relentless assaults on the ACA might have something to do with your notion (albeit subconsciously)that the law might be more flexible? I couldn’t agree with this unless we had a Congress whose intention it was to enact fixes that every law needs once it is aired out. If that happened, we could more realistically see how the anchors of the law need to be loosened.

      I understand your idea of “choice” when it comes to insurance. By the same token, do we allow the hospitals to choose not to treat those who made the choice not to get insurance? The group bears the consequences of the individual’s “choice.”

      I contend that there are times that we are a group and must participate in the group as much as it is anathema to American sensibilities. Our own self-interest compels us to participate in the group because too many suffer the consequences wrought by the individual .

      I think the “2017” provision hasn’t had a chance to show us what great ideas are incubating other than Vermont’s push for single-payer. I am extremely optimistic this provision will surprise us. It’s one of the sleeper provisions.

      The law needs a chance. I expect a wave of entrepreneurs to be cut loose because they are not stuck in jobs for the insurance.

        • It’s just not about financing the EMTALA by the numbers.
          EMTALA is just one part of a systemic breakdown. And there is a
          philosophical question we have to answer. Why should a business be
          forced to treat someone who has willfully decided not to partake of
          the opportunity to get insurance? (Pre-ACA too many were shut out)
          Consider the unpaid ER bills, that personally devastate individuals
          whose ability to contribute economically is greatly reduced. How do
          we measure the psychological toll? At what point does a nation take
          action? OK, fine. People don’t want to get insurance. If folks want
          to drop out, let them drop out all the way — no help. That’s their
          choice, right? But Americans don’t have the stomach for it so they
          put in place half-a** measures to help them push aside the issue.
          If we pull back and look at the big picture, could we ask at what
          point does this breakdown (health and economic) become a national
          crisis? I’m saying the fact that the EMTALA even exists makes the
          point that we need a system where people have the chance to take
          personal responsibility. I think we have reached that point because
          of the tens of millions who are uninsured and under-insured. The
          viability of a nation can be measured by how many hobble and grovel
          for care. And we have to ask how do we compete globally? The EMTALA
          is just one bandaid. Yes, you prevail on the numbers of the EMTALA.
          But one component cannot stand alone. Do away with the EMTALA;
          discontinue reimbursement for uncompensated care; stop the “free”
          drug giveaway programs for uninsured folks who can’t afford
          medicine; stop the funding sites for folks desperate to pay for
          their healthcare; stop all the desperate measures slapped together
          to help people and what do you have. A need for the individual
          mandate and a system where people can realistically buy insurance.
          Last word is yours. I’m done. The Eagles are playing in a foot of
          snow. Game is too good.

      • We don’t have to wait until 2017. In 2014, we will provide health insurance to a few large employers that self insure decreasing monthly premiums through our patented paid up benefits rider.
        In 2015, we will provide our “public option” on the exchange in Texas.
        Don Levit

      • If Austin’s figure of $13.1 Billion is correct then all this discussion regarding the cost shifting involved in the hospital’s bills to the uninsured is a gigantic waste of time.

    • I have to call Bullshit on your idea of “play or pay.” An Amerikan climbing Everest, backpacking through South America or sailing around the world will be obligated to pay but he can play, since Obamacare is not recognized in Nepal, Peru or Bali.

      There’s a similar problam with Medicare: it’s not available outside the USSA, though you might have paid into it for 50 years.

      The best advice to the Millennials: get the hell out of this country while you still can, though you could return if you get sick or disabled in order to cash in on the stupidity of Obamacare.

    • People don’t buy health insurance because it is their civic duty. They buy because they benefit from it.

      If the benefits are the same in each state, wouldn’t the incentives to buy insurance be the same? I don’t see many factors that could make it work in some states and not in others.

      Politics will be a factor, but you are overestimating its effects.

    • If we need to tax younger people to pay for national health
      insurance, we should tax younger people based on their income. A
      young person making $100,000 a year might pay $5,000 more in taxes.
      A young person making $30,000 a year might pay a few hundred
      dollars a year in extra taxes Instead we have these elaborate and
      tortured subisides, depending on each state’s exchange. A young
      person making $30,000 might have to pay $2,000 a year until they
      get subsidies. That is why they are protesting.

      • Sounds like Newton’s 3rd law has an addition, Hertz’s Law:

        For every problem there is an equal and opposite tax. 🙂

    • “An American climbing Everest, backpacking through South America or sailing around the world will be obligated to pay but he can play, since Obamacare is not recognized in Nepal, Peru or Bali.”

      Actually, most Americans travelling like that buy private insurance that will get them patched up and brought back to the US. Where the private insurance they purchased will cover them. Now, that is. Unlike the plans they would have purchased in the past, their US plan will actually cover their care and not kick them off, not remind them that there was a maximum annual payout leaving them bankrupt, or raise their premiums so as to recoup previous payouts (you now have a pre-existing condition when it comes to renewal time), as most pre-ACA plans actually did.

      In real life, though, most Americans don’t like getting medical care outside the US. The language barrier puts off most people, and cultural assumptions about what medical care is can be quite different. Medical care in Japan is the best in the world, but expats of the corporate executive type find the facilities way too Spartan, so there’s a thriving market in expat health care over here. Pretty funny, actually. For those of us who have put in the effort to learn Japanese, the medical care is great. But we do have to work hard to not sound unsympathetic to the poor rich expats who get hit for US levels of medical care charges in Japan.

      • Plans did not raise their premiums to those that had high medical costs. If you have proof otherwise you should provide it.

        Maximum limits can be a problem if they are too low, but in most cases that only occurs with massively expensive treatments that the ACA will not cover. In fact they ACA has the potential to reduce care in many ways so that limits to policies could never be reached. I’d rather have the lower limits and care that is available rather than higher limits where I can’t get the care.

        “Medical care in Japan is the best in the world”

        Can you prove that?

        • “Plans did not raise their premiums to those that had high medical costs. If you have proof otherwise you should provide it.”

          It’s called actuarial pooling by pre-existing condition combined with no guaranteed issue. It’s the way the private insurance market worked in the US: get sick and you are in a different, higher-priced, pool next time around. It isn’t literally insurance companies recouping expenses: it just feels like it to the customer.

          >>>>>>>>>>
          “Medical care in Japan is the best in the world”

          Can you prove that?
          <<<<<<<<<<<

          Well, 30 years of anecdotal evidence backs up the facts: essentially longest life expectancy and lowest maternal/infant mortality/morbidity in the world. And you can't argue that (gun and other) violence in the US is the cause (of the US looking so bad), because the Japanese make up for that with their suicide rate. Also, Japan's after taxes and transfers GINI coefficient is only somewhat better than that of the US.

          And all that for 1/3 the cost*. Japan's doing some things right, and some of those things we need to copy.

          *: The numbers I've been seeing recently don't have Japan's medical care costs being this low: the 1/3 figure appeared in lots of places up to a couple of years ago. Japan's ratio of elderly to working age, and elderly to employed is higher now than they will ever be in the US, so Japan really is doing things impressively well. So far. Things are going to be getting much worse over here in the next 20 or so years.

          • “It’s called actuarial pooling”

            Yes, we know what it is called but what you said was inaccurate and misleading.

            Proof re Japan:

            “Well, 30 years of anecdotal evidence”

            Anecdotal. Nothing more need be said.

    • Austin, you say “Though I support the Affordable Care Act (ACA), I have a great deal of trouble with the idea that people must purchase insurance.”

      Do you feel the same about Social Security and about Medicare? What’s the difference?

    • Austin: I definitely think you’re headed in the right direction, as I mentioned a few days ago the next phase of health reform is likely going to be at the state level. The provisions of the ACA for state waivers are way to strict though, and I’m glad to see you’re willing to see them loosened.

      This also has the added bonus of being one thing that right and left might be able to agree on, because the left doesn’t have to vote to ‘overturn’ Obamacare while the right can, if the state waiver changes are sweeping enough, vote to ‘effectively repeal Obamacare for my state’ which is probably going to satisfy the overwhelming majority of their anti-Obamacare voters. It might be the one thing big enough (other than repeal) to get Republicans to accept some of the ‘fixes’ that proponents of Obamacare want.

      • Even if one thought the ACA was ideal (not saying that’s how I feel), it’s fairly straightforward logic that [pre-ACA status quo] < [ACA + more conservative (or liberal) adjustments] < [the ACA]. Since the Medicaid expansion has already failed in some states and exchanges may yet (though we don't know), the middle way is by far a better choice than insisting it's the ACA or nothing. I've already applied the same logic to variations on Medicaid, by the way. I'd rather see a state innovate (to the extent permitted and, perhaps, requiring a waiver) than do nothing. Unfortunately, many states are doing nothing and it's hard to condone.