First: DOES OBAMACARE CREATE FINANCIAL INCENTIVES FOR PEOPLE TO DROP THEIR COVERAGE? Great microcosm of what’s wrong with the Obamacare debate if we’re looking to better address healthcare system woes in these days of the Patient Protection and Affordable Care Act.
The articles referenced below are cited as an example of why, in my opinion, we’re getting nowhere in working to improve the problems of our healthcare system, including those exacerbated by Obamacare.
Two respected healthcare writers, Michael Hiltzik of the, “Los Angeles Times,” and Michael F. Cannon of the Cato Institute recently had a fight over the law. My thanks in advance to the insights provided by these two as they engage with one another. My observations, obviously are my own, but what is said, that’s published for everyone to look into on their own. Entertaining and educational!
The articles are from April 22, 2014, April 24, 2014, April 30, 2014, May 2, 2014 and May 6, 2014. Use these cites to find articles, since I will provide only author name and date throughout my article.
M. Cannon, 4/22/14, “ACA exchanges at risk,” http://www.losangelesregister.com/articles/obamacare-598142-coverage-people.html.
M. Hiltzik, 4/28/14, “Found: The lamest anti-Obamacare column of all (thus far),” http://www.latimes.com/business/hiltzik/la-fi-mh-lamest-antiobamacare-column-20140428-column.html.
M. Cannon, 4/30/14, “Obamacare makes it easier than ever to free-ride, http://www.ocregister.com/articles/obamacare-612134-coverage-people.html.
M. Hiltzik, 5/2/14, “Cato’s healthcare expert: Still clueless about health insurance, http://www.latimes.com/business/hiltzik/la-fi-mh-still-clueless-20140502-column.html.
M. Cannon, 5/6/2014, “ObamacaCare Makes it Safer Than Ever Not To Purchase Health Insurance—And That’s a Bad Thing (A Response to Michael Hiltzik),” http://www.forbes.com/sites/michaelcannon/2014/05/06/obamacare-makes-it-safer-than-ever-not-to-purchase-health-insurance-and-thats-a-bad-thing-a-response-to-michael-hiltzik/.
SO, WHAT HAPPENED? The articles of 4/22/14 by Michael F. Cannon and April 28, 2014, by Michael Hiltzik.
On 4/28/14, Michael Hiltzik, commenting on Michael Cannon’s 4/22/14 articled dubbed it “the dopiest entry” in Conservative attempts to paint Obamacare as an “unmitigated disaster.” FIGHT!
Mr. Hiltzik continued by showing contempt for the publication that published the article, the “Los Angeles Register (whatever that is),” claimed that Mr. Cannon’s article was a proposition of ways to “scam Obamacare,” and deemed Michael Cannon “irrational” challenging, “Why would a truly rational person take their advice?” FIGHT!
For me, Mr. Hiltzik represents the approach that Democrats have now raised to an art form, using contempt and sarcasm and personal attacks instead of addressing the issue (which of course takes a little more work, and why bother, we’re not paying attention anyway, that is how we got Obamacare in the first place!).
So what got Mr. Hiltzik stooping to schoolyard bullying strategies? Ah, that’s more significant. Mr. Hiltzik, ostensibly not dumb, used another Democratic tactic, the thick-headed and deliberate “misinterpretation” strategy claiming that Mr. Cannon’s article (of 4/22/2014) stated “that people are financially better off if they drop their coverage and ‘wait until they get sick to re-enroll,’” M. Hiltzik, 4/28/2014.
Dirty pool Mr. Hiltzik, the old literally-true-but-actually-false form of argument because of course, those words DO occur in Michael Cannon’s article.
Mr. Cannon states that the number of uninsured “may rise as Americans learn about the financial incentives Obamacare creates for healthy people to drop their coverage, save their money and wait until they get sick to re-enroll,” M. Cannon 4/22/2014.
Obviously what Mr. Cannon said is DIFFERENT FROM WHAT MR. HILTZIK asserted.So why the thick-headedness on the part of Mr. Hiltzik? Because he was too lazy to address the issue Mr. Cannon raised: Whether Obamacare creates FINANCIAL INCENTIVES for HEALTHY people to drop their coverage, (Cannon, 4/22/14). The answer: YES.
Financial incentives usually represent the opportunity to save or gain money, yes? If you’re healthy, you don’t need health insurance, which is a financial product that should protect you from a CONTINGENCY, a WHAT-IF something happens, true? Of course it is.
Back to Mr. Cannon's claim,the number of uninsured “may rise as Americans learn about the financial incentives Obamacare creates for healthy people to drop their coverage, save their money and wait until they get sick to re-enroll,” (M. Cannon 4/22/2014.)If you knew you weren’t going to have anything happen to your home, your life, your automobile, and IF THERE WERE NO LAWS REQUIRING YOU TO PURCHASE INSURANCE which there are in most cases of vehicle ownership, and for your home if you have a mortgage, would you pay for INSURANCE THAT YOU KNEW YOU WOULDN’T NEED? No rational person would. INSURANCE is designed and marketed to cover the IFS of life. If the IF doesn’t occur, insurance is an expense, a payment that the company keeps.
But of course Mr. Cannon makes two mistakes in his assertions of 4/22/14 that will impact whether the financial incentive for healthy people not to have insurance is outweighed by other facts, and again, the answer is YES.
FIRST, most individuals want to follow the law and recognizing that the tens of millions of people who opted out of health insurance in our country would continue to opt out of this expense, the PPACA makes it AGAINST THE LAW not to have health insurance which subjects people to a tax. This tax is a disincentive to opt out of health insurance coverage.
SECOND, Mr. Cannon also omits the likelihood that services that were affordable in terms of being paid for out-of-pocket before being mandated as essential health benefits that have to be provided by health plans and services that are preventive care (the “freebies”) under Obamacare are likely to become unaffordable because now insurance companies are paying providers, who naturally continue to raise their rates unconscionably. Obviously, if out-of-pocket expenses continue to rise (which they have and which Obamacare does not address in terms of reasonable limitations on what they can charge) then getting even preventive care (which is not an insurance-type of expense paying for the Ifs) will become unaffordable out-of-pocket. (Mr. Cannon is artificially hemmed in by his politics in this area, unable to address the real issue of rising provider costs because of the phony free market argument, phony because of all the LAWS that enable this alleged “free market competition” that results in Americans paying so much more for medical services and treatment than other countries).
Yet, Mr. Cannon’s point is well-taken and not “dopey,” let alone “dopiest.” If you’re healthy then having insurance coverage is simply an expense, you don’t need it (except as provided above). Therefore, NOT having health insurance is financially incentivized.
Further, as health insurance becomes even more expensive, which even Democratic former Health and Human Services Secretary Kathleen Sebelius asserted it would on March 12, 2014 (search Sebelius premiums to go up) when she said, “I think premiums are likely to go up, but go up at a smaller pace than what we’ve seen since 2010,” the incentive not to have the expense of health insurance obviously also goes up for those healthy individuals weighing the expense of having health insurance.
But Mr. Cannon too readily dismisses the disincentive to opt out of health insurance including the rising cost of healthcare services AND the illegality of not having health insurance.
Mr. Cannon and Mr. Hiltzik omit another important feature of Obamacare, it increases the copayments, coinsurance and deductibles that people will be paying in addition to premium costs for health insurance. These increased expenses could actually also financially incentivize people from purchasing health insurance since the costs of needed medical care and services may very easily bankrupt individuals WITH health insurance.
Moving on, Mr. Hiltzik misstates what Mr. Cannon says regarding advising against having health insurance since in his 4/22/14 article Mr. Cannon states, “I get viscerally anxious when I hear from intelligent, responsible people that they have dropped their family’s health insurance because Obamacare so significantly increased their premiums.” Hardly sounds like Mr. Cannon is “advising anyone to go without health insurance” as Mr. Hiltzik asserts (4/28/14).
Having misstated what Mr. Cannon says, Mr. Hiltzik reverts back to the stubborn inaccuracies of Obamacare marketing and asserts in his 4/28/14 article, “It should be obviously that advising anyone to go without health insurance (NOT TRUE) especially WHEN IT’S BEEN MADE AFFORDABLE BY THE ACA….” Hey what? AFFORDABLE?
In my own post of 12/31/13, “Ask them to Explain ‘Better Coverage For Less,’” http://conoutofconsumer.blogspot.com/2013/12/ask-them-to-explain-better-coverage-for.html I run through whose health insurance might be more affordable. Mr. Hiltzik shoves in this little piece of arguably untrue propaganda as part of his snipe attack, did you catch it?
Mr. Hiltzik then goes into a rant that makes little sense to me identifying some of the facts Mr. Cannon laid out in his article of 4/22/14 as not “rational,” (Hiltzik, 4/28/14) It’s a bit of a mess, but it seems that Mr. Hiltzik has chosen to identify Mr. Cannon’s discussion of financial disincentives to obtain health insurance created by Obamacare as “SCAMS.” They are not.
But in all fairness, Mr. Cannon stretches the truth as well. Obamacare didn’t create all the financial incentives for dropping health insurance, after all, tens of millions of Americans had opted out of health insurance before Obamacare and to date, tens of millions of Americans have still opted out of health insurance.
On 4/22/14, Mr. Cannon argued that financial incentives to NOT have insurance are increased under Obamacare if you’re healthy. Yes, if you’re healthy, not paying for a financial product that is designed to cover the contingency of you getting sick will save you money, the same way if you pay for homeowner’s insurance and your home is not robbed, destroyed, et cetera then your premiums are essentially down the drain for the year. Since Obamacare raises the cost of such health insurance coverage for many Americans, their savings would be that much more without paying for health insurance.
However, Mr. Cannon does consider individuals motivated to follow the law, the individual mandate, nor does he provide awareness of the fact that medical charges by providers keep going up and coverage by insurance tends to accelerate those amounts so that we can expect to see the fees charged by providers of essential health benefits and preventive care services that are now required to be covered under health insurance plans go up significantly, perhaps rendering the affordability of these services out of reach unless you have health insurance.
Mr. Cannon then discusses pre-existing conditions arguing that a person need not worry about getting a dire diagnosis when he or she is uninsured since they cannot be denied coverage nor can they be charged more in premiums for such coverage after such diagnosis (Cannon, 4/22/14).
Mr. Hiltzik becomes seemingly agitated over this assertion claiming that Mr. Cannon’s example is “ghoulish,” and arguing the separate issues of the practicality of Mr. Cannon’s example in terms of having to delay treatment until you obtain coverage the following benefits election period, (Hiltzik, 4/28/14).
In this case, though poorly framed, Mr. Hiltzik brings up a good point. Mr. Cannon’s argument that because Obamacare represents increased health insurance costs to many Americans (TRUE) and because Obamacare prevents those with pre-existing conditions from being charged more for health insurance premiums (TRUE) that more people will wait until they get a bad diagnosis before purchasing health insurance (NOT NECESSARILY TRUE).
Mr. Hiltzik argues that Obamacare has made health insurance more “affordable” (FALSE for millions of Americans outside of the entitlements created by Obamacare and for those living in states that have adopted the expansion of Medicaid that makes them newly eligible for that program). Then Mr. Hiltzik attempts to shift the argument Mr. Cannon makes by focusing on the fact that delaying treatment until you obtain coverage is unwise, sarcastically stating, “What’s the risk that you’ll have to wait, say, 11 months to see a doctor for your cancer?” (Hiltzik, 4/28/14)
This is a real, “Calm down, Mr. Hiltzik,” moment. Mr. Cannon asserted that Obamacare creates the OPPORTUNITY to wait to purchase insurance until you get a bad diagnosis as a financial incentive. Yes sir, that is true because you can’t be DENIED coverage for a pre-existing condition and you can’t be charged more in premiums for that condition. These are both features of Obamacare.
However, both writers miss the point on this one. The real issue is what TYPE of health insurance people will purchase. If you’re well, you’re likely to purchase cheaper and therefore less coverage for your health insurance plan. There has ALWAYS been a worry that those with pre-existing conditions will dominate the market for the gold-level plans because they provide better coverage. The real financial incentive Obamacare creates is for people to buy cheaper plans that will INADEQUATELY cover their expenses in the event of needed medical care, the problem of the UNDERINSURED, which ultimately could add strength to Mr. Cannon’s argument since if you have insurance but can’t afford to use it because of additional outlays of cash required, the value of your health insurance product goes down.
Finally Mr. Hiltzik rants, “Here are the ways the Cato Institute proposes for you to scam Obamacare: You can get married, have a kid, impoverish yourself so you qualify for Medicaid, or commit fraud. If you’ve been diagnosed with a dire disease you can uproot yourself and move to another state,” (Hiltzik, 4/28/14).
In addressing the issue of enrollment periods, Mr. Cannon does not propose SCAMS but he does state, “In many cases you can get coverage before January,” (Cannon, 4/22/14) which is true. However, Mr. Cannon overstates the possibilities “created” by Obamacare, since many of those ways of getting coverage before January existed, as Mr. Cannon should know before Obamacare.
Mr. Cannon’s list includes situations such as loss of job, birth of child, marriage, death, and relocation are justifiable reasons for people to be able to modify or change their insurance at any time, (Cannon, 4/22/14), all possible BEFORE Obamacare and therefore NOT financial incentives to drop insurance coverage CREATED by Obamacare.
But Mr. Hiltzik talks of “scam,” (Hiltzik, 4/28/14)Health insurance is regulated by state, much as car insurance or homeowner’s insurance. People in the US have always had the option to travel to states with more favorable laws for their condition. Mr. Hiltzik inaccurately refers to this as a “scam.” Whether it’s a state advertising a friendly business environment like NY or a state advertising more tolerant drug laws, citizens have a CHOICE of where they can live and similarly they have the choice to consider the health care policy and programs available in a particular state that makes sense for them.
Obamacare STRONGLY financially incentivizes moving to a state that has adopted expanded Medicaid if you need to take advantage of that program and Mr. Hiltzik is being ridiculous if he calls that a “scam.” Medicaid does not have an ENROLLMENT PERIOD, anyone eligible can obtain Medicaid at ANY TIME DURING THE YEAR. This isn’t a scam, it’s a fact and it predates Obamacare.
Furthermore, Obamacare financially INCENTIVIZES putting off Medicaid enrollment until you get sick because it is likely that states will exercise their PRIOR right under a 1990s law to recover Medicaid costs from individuals’ estates because by making more people eligible who have some but not much money, it is likelier SINCE OBAMACARE that Medicaid patients who die will have an estate to recover from.
Therefore, by putting off using and enrolling in Medicaid until you need it since you can enroll when you need it and even RETROACTIVELY, up to three months before the month you apply for Medicaid if you would have been eligible if you had applied three months earlier (http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Eligibility/Eligibility.html), you can reduce what your estate will owe to Medicaid.
Obamacare STRONGLY financially incentivizes grown children in having health insurance from their parents’ health insurance. Mr. Hiltzik feigns outrage, and I can only assume that someone as “knowledgeable” is feigning his outrage in stating, “Rely on ‘friends, family, or the kindness of strangers,’” (Yes, he actually wrote this.)”
Mr. Hiltzik is aware that this was exactly the intent of Obamacare’s provision for PARENTS to have the OPTION TO pay for their grown children’s health insurance on their own plans until the age of 26, eg dependent coverage through age 26, wasn’t he? Isn’t he?
Was he so caught up in the President’s self-congratulatory rhetoric that millions of younger people were newly insured because their parents were paying for their children’s coverage on their own policies that he forgot this fact?
Before Obamacare anyone COULD pay for anyone else’s health insurance. Post Obamacare, you can still pay the costs for someone else’s health insurance. Obamacare ADVISED young adults to ask their parents to pay for their policies: “If you’re under 26 years old, you may be able to get insured under a parent’s plan,” (https://www.healthcare.gov/how-does-the-health-care-law-protect-me/#part=7).
In short, M. Hiltzik comes across as close-minded, inaccurate and contemptuous of ANY criticism of Obamacare and Mr. Cannon comes across as overstating his case by stretching what Obamacare has created (eg ignoring what existed before Obamacare versus what was actually created by the PPACA). For me, the two provide great insights into our country's stalemate that makes consumers the losers, democrats failing to admit there's a problem with Obamacare flying in the face of reality and Republicans blaming all our healthcare system's problems on Obamacare, also flying in the face of reality.
The next article will discuss where these two seem to “agree.”
