Friday, January 6, 2017

Has Obamacare 'Worked'?

Was The Overall Cost of Obamacare Worth It?
You are going to see and hear a lot of debate in the next few months about 'repeal and replace' the ACA, otherwise known as 'The Affordable Care Act', aka 'Obamacare'.

The question really seems to revolve around the issue of whether it is truly 'affordable' or not, yes?

Not just to the individuals who have been added to the Medicaid rolls, essentially for free, or to the individuals who have been able to afford subsidized health insurance on the exchanges but to everyone as a whole when counted collectively as federal and state taxpayers and individually as participants in the private health insurance market where many to most people have seen their private health care premiums simply explode over the past 6 years of implementation.

First, here are some hard stats for you to begin the year with:

'In calendar year 2016, on an average monthly basis, according to CBO:

  • 57 million people will be enrolled in Medicare, 
  • 77 million will be enrolled in Medicaid, 
  • 6 million+ will be enrolled in CHIP, and 
  • 12 million+ will be covered by insurance purchased through the marketplaces

Among people who are under age 65:
  • Most—about 155 million—will have private health insurance obtained through an employer, 
  • 9 million+ will be covered by a non-group policy purchased directly from an insurer, and 
  • 27 million+ (or 10 percent of the under-65 population) will be uninsured'

Roughly 11 million people are considered 'dual eligible' for Medicaid and Medicare due to their age and income status. There are only 313 million people in the US today and the above totals add up to 343 million less the 11 million dual-eligibles for a total of 332 million so there is a lot of double-counting going on somewhere in the official CBO/Joint Tax Committee 'éstimates'.

Dual-eligibles make up 14% of Medicaid enrollment, yet spend approximately 36% of Medicaid expenditures. Dual-eligibles total 20% of Medicare enrollment, and spend 31% of Medicare dollars.

The total amount of government funds spent on dual-eligibles accounted for close to $300 billion in 2011 alone. It has to be close to $400 billion today spent between the federal government 100% through Medicare and mostly through the federal share of Medicaid plus the matching state funds.

It might be wise to consider some sort of new category entirely in the federal budget to deal solely with dual eligibles in any upcoming health care reform.

'In calendar year 2014, national spending for health care was an estimated $2.9 trillion. Of that amount:

          52 percent was initially financed by private sources:

  • 34 percent came from private health insurers; 
  • 11 percent, from consumers in the form of out-of-pocket spending; 
  • 6 percent, from other sources of private funds, such as philanthropy

    The remaining 48 percent of national spending on health care was public: 
  • Gross federal spending for Medicare accounted for 22 percent;
  • Federal and state spending for Medicaid and CHIP, 18 percent; 
  • Spending on various other programs (including those run by state and local governments’ health departments, by the Department of Veterans Affairs, and by the Department of Defense), for 8 percent.'
There will be a test tomorrow on all these facts.

Imagine you are a freshman Congressperson from Idaho who has just been sworn in to uphold the Constitution 'to the best of your ability' and you really wanted to go to Congress to work on ranch issues and 2nd Amendment rights. The first thing you might be asked to vote on is the overhaul of close to 17% of our national economy and 'repeal and replace Obamacare' in the next 100 days.

Given the immense complexity of the issue as evidenced by the above stats from CBO and Joint Tax, do you think you would be ready to cast such a momentous vote as one of your first acts in Congress?

It ain't easy.

Estimates are that since the passage of the ACA in 2010, roughly 15 million people have been added to the Medicaid rolls mostly across the 31 states (including DC) that enacted Medicaid Expansion as allowed under ACA. Another 10 million people are estimated to have been added to the private insurance rolls under the subsidized federal exchanges in the states that enacted such exchanges.

However, other estimates say that close to 5 million people who previously had private insurance or employer-sponsored insurance either dropped their coverage, lost it or couldn't afford it as private insurance premiums skyrocketed in many cases over the past 4 years, 25%+ per year in many of those cases.

In the private individual market, we experienced at least a 25% per year annual increase. We are fortunate to still have coverage and be able to pay for it. Many people couldn't do it.

So, after all of the Sturm und Drang and political angst over Obamacare, with 2 congressional elections in between passage of it and today including one of the nastiest presidential elections ever in American history, we think we can fairly say that 15 million previously uninsured people are now covered by Medicaid through the ACA and 10 million new people may have private federal-taxpayer subsidized insurance but that accounts for only a net gain of say 5 million more people covered by private insurance since the passage of the ACA.

Was it worth it? That is the question Congress and the new President will have to answer in the coming months.

What we would like to see but is beyond our capacity to ever guess-timate is a report that adds up the entire cost of the spiraling, escalated private insurance for everyone other than the new 10 million enrollees in the federal exchanges, the 164 million people covered by private insurance either through employer-paid plans or non-group individual plans, over the past 4 years and compares that to the direct cost of paying for the expanded cost of Medicaid with the 15 million new enrollees plus the subsidy costs of the 10 million people who now have health insurance.

That must be an enormous number when you add up the additional cost of the health care plans for 164 million people paying anywhere from 10%-35% more per year for the past 4 years.  It may be that it might have been less expensive to us as a nation as a whole to have included not only the 15 million new enrollees in Medicaid expansion as has already happened but also have added the 10 million people enrolled in the federally-subsidized ACA exchanges into Medicaid instead of the exchanges and hoped that the 10-35% annual increases in the vast majority of private insurance plans might have moderated some to at least single digits, not high double digits since 2013.

It is something to consider.

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