ObamaCare and the Winter Olympics

Jimmy Fallon Compares ObamaCare to the Winter Olympics

This week, the administration announced that it would “ramp up” its advertising for ObamaCare during NBC’s coverage of the Winter Olympics to encourage younger Americans to purchase health insurance.  Late night comedians soon went to work. According to Jimmy Fallon, the administration’s plan “makes sense if you think about it. ObamaCare went downhill fast, left people cold, then somehow managed to skate by….that’s good marketing there….The Olympics are a lot like Obamacare. You know, because they both take around four years to get it together.” After a tough 2013, I’m sure the Obama adminstration was hoping the new year would bring a new policy story.

Time will tell how well the administration will “get it together” in 2014. I’d argue that recent news reports about the number of new enrollees represent an incomplete picture of success. The best measure of  ObamaCare’s impact is not how many Americans indicated a desire to sign up for insurance online, over the phone, orin person in recent weeks, but rather how many actually pay premiums to their private insurers to complete the enrollment process. In Rhode Island, the state’s health insurance exchange, Health Source RI, recently extended the deadline for individuals to pay their premiums into the second week of January. This is not an encouraging sign, for it suggests that many individuals who’d signed up may not actually purchase a plan. Rhode Island’s record is significant here, for the state offered an unusually supportive climate for implementing the new law, replete with political support from the governor and a multimedia ad campaign. To date, however, the CEO of Blue Cross and Blue Shield of RI, the state’s largest private insurer (and the only traditional insurer to offer individual policies through the state’s exchange) reported that enrollment remains “disappointing.”

In this end, judgments about ObamaCare can draw an important lesson from the annual college admissions process. Each year, colleges accept many more students than actually enroll. For admissions officers, the most important statistic is the number of accepted students, but rather the “yield” from each applicant pool – that is, how many students actually submit their deposits and pledge to attend their college or university. Until we have a better sense of the “yield” from individuals who enrolled in coverage through the exchanges, we won’t know how many Americans gained coverage. Even that, however, is not a net total, for it’s still unclear how many Americans lost their policies as a result of the administration’s minimum effective coverage regulations, or how many of these individuals were able to purchase new coverage or renew dropped policies. Accurate estimates of how many Americans gained coverage must account for losses in the private insurance market as well. The jury, in other words, is still out.

Small businesses and health care reform

This week, the Obama administration announced that health insurance exchange enrollments quadrupled in November after a troubled debut in October. Administration officials declared that the website glitches that plagued healthcare.gov were now a thing of the past. As I noted earlier this month in an interview with Gene Valicenti on 630-WPRO, however, the health insurance exchanges remain a work in progress. Insurers continue to report problems accessing subscriber data entered through healthcare.gov. Corrupted or missing data raises insurers’ costs and also delays the completion of the enrollment process. The Obama administration has yet to release demographic data on new enrollees. This is significant, because the long term “affordability” of the Affordable Care Act (ACA) depends not only on the number of newly insured Americans but also by the characteristics of these newly insured consumers. Two issues, in particular, warrant close observation in the coming months.

Before Thanksgiving, the Obama administration announced that it would postpone launch of the Small Business Health Options Program (SHOP) by one year for states with federally operated exchanges. Thus, in more than 30 states, small firms who expected to purchase coverage through the exchanges are now scrambling to renew their existing health insurance coverage or are shopping for other plans. Since these small businesses will not join the exchanges during the ACA’s inaugural year, their employees – many of whom are relatively young, healthy workers –  will not be available to offset the costs of older, sicker individuals purchasing coverage through the exchanges. As a result, per-enrollee costs for the first year of the ACA may be considerably higher than expected.

The second challenge flows from the first. Insurers are under no obligation to participate in the new health insurance exchanges – indeed, many of the nation’s largest carriers opted out for the first year. If costs per enrollee exceed projections, insurers are likely to raise rates or drop out of the marketplaces altogether. If insurers raise rates substantially, some consumers who purchased coverage this year may opt to not renew their coverage, or alternatively, may select cheaper plans with higher out of pocket costs. Stay tuned…the rollout of the ACA is never dull!

The ObamaCare Trojan Horse

In recent weeks, President Barack Obama sought to soothe growing public concerns about the troubled healthcare.gov website, arguing that “The Afforable Care Act is not just a website. It’s much, much more.” How much more became evident in recent weeks, as millions of Americans with individual health insurance received notices that their policies would be dropped because they failed to comply with ObamaCare’s minimum essential coverage standards. Congressional Republicans repeated calls to repeal the ACA, while Democratic legislators scrambled for political cover. On November 15, the House of Representatives voted to approve the “Keep Your Health Plan Act of 2013,” which would allow private insurers to continue to sell existing policies through 2014. The bill’s bipartisan support –  39 Democrats joined 222 House Republicans – reflected the political firestorm unleashed by the surge of cancellations over the past month.  In early November, President Obama apologized to Americans losing their health insurance coverage, admitting that the implementation of the ACA had not fulfilled his oft-repeated promise to voters that “if you like your private health insurance plan, you can keep it.”

Lost in the media frenzy about broken promises, however, is the fact that the wave of cancellations are not an unintended “side effect” of a flawed implementation process, but rather an intentional policy choice by the Obama administration. Compared to the higher profile and widely discussed elements of the ACA such as the individual mandate, the employer mandate, and the rollout of the health insurance exchanges, ObamaCare’s minimum effective coverage requirements raised few eyebrows among policymakers and the public. These arcane rules, however, are vital to the design of the ACA.

The administrative regulations issued by the Department of Health and Human Services are a Trojan Horse left at the doorstep of private insurers selling policies in the individual insurance marketplace. During the Trojan War, the Greek army laying siege to Troy constructed a massive wooden horse and left it at the city gates. The residents of Troy accepted the “gift” and proudly displayed it as a victory trophy. Under cover of darkness, however, the real purpose of the Trojan Horse became evident as Greek warriors, safely hidden within the massive structure, exited the horse and opened the gates for the waiting army, which subsequently sacked the city.

In a similar vein, ObamaCare’s regulatory requirements largely remained under cover of a media blackout, as President Obama insisted that “no matter what you’ve heard…if you like your private health insurance plan, you can keep it.” After the Supreme Court’s ruling in June 2012 upheld the basic structure of the ACA, President Obama repeated this claim, declaring that “if you are one of the 250 million Americans who already have health insurance, you will keep your health insurance – this law will only make it more secure and more affordable.” Instead of making individuals’ coverage “more secure,” however, the administration’s rulemaking process ensured that most of the 15 million Americans who’d purchased less comprehensive (“substandard”) policies would need to upgrade their plans.  The real purpose of these requirements – the law’s hidden Trojan Horse – was to eliminate “substandard” private plans and replace them with new, more comprehensive coverage.

Recent news reports indicated that as early as 2010 administration officials recognized that most Americans who’d purchased cheaper plans in the individual insurance market would need to change policies, as these plans would not meet the minimum coverage requirements established by the ACA. In a nationally televised news conference on November 14, President Obama encouraged those who’d lost coverage to shop for “better insurance.” Although he admitted that the cancellation of millions of private policies was “upsetting,” the president defended the ACA’s more stringent coverage requirements as the price of progress. “It is important to understand,” he declared, “that the old individual market was not working well. And it’s important that we don’t pretend that somehow it’s a place worth going back to.”

The administration’s apologies about the unintended consequences of the ACA simply don’t hold up to close scrutiny. The disruption of individual insurance markets was neither accidental nor unanticipated. Practically speaking, the viability of the exchanges depends, in large part, on enrolling millions of healthy young subscribers that previously purchased less comprehensive, low-cost private coverage. The individual mandate provided policymakers with leverage, but the administrative rules issued by the Department of Health and Human Services – a regulatory Trojan Horse – ensured that millions of Americans would need to upgrade their coverage by participating in the new health insurance exchanges.

What the public knows

On the day the new health insurance exchanges made their debut in states across the USA, the public remains thoroughly confused about what the new health care law means. Teaching courses on health care reform, policy analysis, and health care in popular culture to savvy undergrads provides me with a small army of astute health care observers. Yesterday, six of my students shared the following video from Jimmy Kimmel with me:

The interviews presented in the video underscore the political problem facing the ACA. People’s views on health care reflect their partisan loyalties, ideology, and level of information. Most Americans still don’t understand the complexities of the law, how it will affect them, and what it means for the country. This is not simply a result of “misinformation” campaigns by opponents, although it’s clear that individuals’ perceptions of the law are shaped by their views of the President. Recent polls, however, suggest that “ObamaCare” can also have a positive impact on public perceptions, depending on whether respondents live in traditionally “red” or “blue” states. Support for the ACA/Obamacare, therefore, will remain mixed for the foreseeable future, and will vary widely from state to state. To change this state of affairs, supporters of reform must tell a new policy story that can bridge the gap between the insured and uninsured, and between businesses and employees. The rhetoric about health care reform continues to divide us, rather than bring us together. 

Understanding the Real Cost of “Affordable Coverage”

Today’s opinion column in USA Today highlighted the potential for a “bumpy” rollout for the new health insurance exchanges next month. The prospect of technical glitches, however, is the least of the Obama administration’s worries about implementing reform. The biggest challenge lies in persuading uninsured individuals and those who purchase coverage in the individual or small group markets that the new plans are worth the price. Administration officials continue to trumpet the affordability of the new plans. As HHS Secretary Kathleen Sebelius noted last week in USA Today, “With more than half of all uninsured Americans able to get coverage at $100 or less, the health care law is delivering the quality, affordable coverage people are looking for.” Premiums, however, are only one part of the cost of health insurance coverage. Newly enrolled consumers are in for a surprise, for the most affordable plans available for purchase in the new exchanges also impose high out of pocket costs on patients who use health care services. These costs are likely to have the greatest impact on chronically ill patients who are more frequent users of laboratory services, diagnostic imaging, and prescription drugs.

The rates announced by HealthSourceRI, Rhode Island’s new health insurance exchange, underscore the real cost of health insurance coverage. Premiums for “Bronze” plans offered by Blue Cross and Blue Shield of RI range from $166 – $177 per month for healthy 25 year olds. But what does this buy? Upon closer inspection, not much. Each plan includes a very high deductible ($5000-$5800 for individuals, $10,000-$11,600 for families). Thus, low-income individuals who are high users of the health care system may have to contribute thousands of dollars towards their care each year on top of the premiums they pay. In addition, the plans require substantial cost sharing (co-payments and co-insurance) at the point of service. Each ER visit, for example, can cost a newly insured individual up to $350; co-payments for primary care visits range from $40 if the individual participates in a “patient centered medical home” to $60 for other PCPs. Specialist care costs more. Prescription drugs also include significant cost sharing of up to $250 for the most expensive “Tier 4″ drugs. While individuals in such plans will enjoy better access to preventative services, they are unlikely to feel “well insured” if they actually have to use the health care system for a serious illness.

As I noted in an interview with 630 WPRO’s Gene Valicenti last month, the success of ObamaCare is ultimately a question of persuasion. Young, healthy individuals must choose to enter the insurance marketplace, rather than paying a nominal $95 penalty in 2014. For the uninsured, the most affordable coverage available under the new exchanges is likely to be a tough sell.

The Selling of Health Care Reform

Last week, several new polls appeared that underscored the rhetorical challenges facing supporters of the Affordable Care Act (ACA). In the most recent USA Today/Pew poll, for example, a majority (53%) of Americans now disapprove of the health care law; remarkably, a similar percentage disapproved of President Obama’s handling of health care policy. The most recent NBC News/Wall Street Journal Poll revealed that even Americans who are currently uninsured remain unpersuaded that they’ll be better off after the implementation of the ACA; 34% of uninsured Americans believed they’d be worse off under reform, while a majority (52%) felt the law would have no difference for them. 

Administration officials continue to blame the “misinformation” campaigns led by Republicans in Congress and conservative critics for the public’s lukewarm response to the ACA. From a rhetorical perspective, however, there’s more to the story. In debates over reform, the burden of proof rests with supporters of the law, beginning with the President. Blaming opponents for criticizing the ACA misses the point. Administration officials need a better story that connects with the public. To date, critics of the law have successfully planted doubts about its impact on Americans’ choice of providers, the quality of care available to patients, and the cost of reform. Many of these critiques focus on the expanded role of government, and the importance of personal liberty as a value in health care reform debates. While Administration officials continue to dismiss such attacks, neither President Obama nor other supporters of the ACA have been able to defuse them. Writing more than 25 years ago in Human Communication as Narration, Walter Fisher argued that “the experts’ stories are not at all beyond analysis by the layperson. The lay audience can test the stories for coherence and fidelity.” The most recent polls that the the real work for supporters of the ACA remains persuading a skeptical public that health care reform can work, and that the result will be consistent with American values. After three and a half years, a new rhetorical strategy is clearly needed; merely repeating the same arguments is unlikely to “bend the curve” of public opinion. 

Will coverage under the Affordable Care Act be ‘affordable’ enough?

The hazy, hot and humid days of summer led me to take some time off from blogging to go camping, and even catch Taylor Swift in concert at Gillette Stadium. Now that the heat wave is past, and cooler days and nights have arrived, it’s time to catch up on recent discussions of health insurance premiums. In July, I had a chance to sit down with Chrissy Centazzo from the PC Public Affairs office to chat about the debut of Rhode Island’s health insurance exchange, HealthSource RI. In recent weeks, President Obama and many state officials trumpetedlower than expected premiums for health insurance offerings under the new health insurance exchanges in states such as California, Maryland, Oregon, Tennessee, and Virginia, among others. Defenders of the ACA argue that premiums will be more affordable for uninsured families, and small businesses and individuals who will purchase coverage through the exchanges. The long term success of the ACA in expanding coverage and controlling costs, however, depends on signing up healthy young subscribers.

Selling the plans, however, will be a challenge. While projected premiums are lower than many forecasts, coverage through the state exchanges is not cheap. As Louise Radnofsky noted, individual premiums for twenty-five year olds who don’t smoke ranged from $117 per month in Tennessee to $156 per month in Baltimore. Will cash-strapped consumers opt to purchase coverage at an annual cost of at least $1400, or will they continue to rely on safety net providers and hospital emergency rooms for care? Since the annual penalty for not purchasing coverage ($95) is less than the cost of one month of the most affordable health insurance on the market, how many healthy young adults will choose to pay substantially more to purchase coverage, particularly when the “Bronze” level plans impose significant cost sharing for newly insured subscribers? As the Fall enrollment season approaches, both supporters and opponents of ACA will weave stories to define the success or failure of the individual mandate. Stay tuned… the debate over ObamaCare has just begun…