Here’s the good news. Only 1 percent of Americans are (1) legal US residents, (2) uninsured, and (3) do not have access to subsidized health insurance. This fact comes from the health economist Brian Blazebased on a recent Congressional Budget Office Report.
Currently, 24.3 million people in the United States are uninsured. But except for those here illegally, almost everyone else is eligible to enroll in Medicaid, Medicare or private plans like those offered on the Obamacare exchanges or through employers.
Enrollment in Medicaid is free, Obamacare insurance is heavily subsidized, and nearly all employer-provided insurance is required to be “affordable.” Thus, arguably, we have achieved “universal coverage” or something very close to it.
Here’s the bad news. Almost all of the increase in health insurance coverage under Obamacare was the result of Medicaid expansion. When Obamacare was being discussed, its supporters never said they planned to put the uninsured on Medicaid. But that’s what happened.
What’s up with that? Two things.
First, since Medicaid pays the lowest provider fees, Medicaid enrollees are the last patients doctors want to see. Almost a third of doctors will not take any new Medicaid patients. Second, since Medicaid eligibility is determined by income, people find that it is are registered and registered frequently over a few years.
Families at the bottom of the income spectrum are finding that as their incomes rise and fall and as their job opportunities fall and fall, they bounce back and forth between eligibility for Medicaid, eligibility for subsidized insurance on the exchanges, Obamacare eligibility to provide employer coverage and sometimes eligibility for none of the above. Non-continuity of health insurance usually means no continuity of medical care.
Based on raw numbers, the Congressional Budget Office tells us that the number of people with private insurance has increased by 1.6 million during the last decade. But remember, Obamacare was created as America recovered from the Great Depression. Thus, even without any change in health policy, we would expect that as more people found work, more people would be privately insured. Overall, there is little reason to believe that Obamacare has increased the number of people with private coverage at all.
However, there has been a significant change in the type of private insurance that people have. Increasing the number of people with coverage purchased on the Obamacare exchanges (where the average government subsidy is about $6,000); offset with a reduction in employer-provided coverage (where the average subsidy is $2,170).
Other than pointlessly adding to the federal deficit, what’s wrong with it? Four more things.
First, the standard plan offered on the exchanges pays provider prices that are not much more than what Medicaid pays. As a result, these programs resemble high-deductible Medicaid. Second, the discounts are really high. In Dallas, Texas, for example, a middle-income family of four that gets insurance on the exchange pays no premiums at all. But if a family member gets sick, the out-of-pocket exposure is $9,100. If two family members become ill, the exposure is $18,200. And this every year.
At lower income levels, children may qualify for Medicaid, and adults may qualify for subsidies that reduce out-of-pocket costs. But these freebies from the government aren’t “free” at all. Benefits are phased out quickly as income rises. So if the family earns an extra $1,000 in wages, it may lose many times that amount through higher health care costs.
A fourth problem is that enrollees in the Obamacare exchanges often lack access to the best doctors and hospitals. Our family in Dallas, for example, doesn’t have access to the city’s Baylor Medical Center or UT Southwestern Medical Center or MD Anderson Cancer Center in Houston.
Consider these titles:
Despite the appearance of universal coverage, we do a very poor job of providing care for those at the bottom of the income scale. Careful studies have determined that Medicaid itself is a poor health insurance program. In most meticulous study The researchers found that Medicaid in Oregon had no effect on enrollees’ physical health, and that after enrollment, emergency room traffic actually increased. A later study found that Medicaid enrollees value their Medicaid participation 20 cents on the dollar.
It’s not clear that Obamacare’s exchange insurance is much better. One reason Congress in recent years added an additional level of subsidies for higher-income families is that the unsubsidized portion of the individual market was in death spiral. It seems that very few people are willing to pay the market price for what Obamacare has to offer.
That said, there are pockets of excellence here and there within the safety net.
Parkland Hospital in Dallas delivers nearly 13,000 babies each year. It is one of the largest birthing centers in the country. Almost all mothers are low-income minorities. Over three quarters are Hispanic and I suspect many of them are undocumented. This is a group researchers call “at risk.” However, among those who go through the prenatal program, infant mortality is half that for similar populations elsewhere.
The birthing program at Parkland has been going on for several decades and I wrote about it Priceless. It includes extensive prenatal and postnatal care provided by nurses. Most births are performed by midwives, not obstetricians.
Although the hospital does not release the figures, I suspect that this non-profit institution actually makes a “profit” from delivering babies by pooling various sources of government funding, minimizing staff costs and avoiding costly complications that lead to infant and maternal death.
The Parkland baby delivery program is an example of this Harvard professor Regina Herzlinger he calls a “focused factory.” These are places where providers become very good at providing high-quality, effective care. There would be a lot more Parklands around if we changed the way the health care safety net works.
Boston University economist Laurence Kotlikoff I and have advocated replacing Medicaid, the Obamacare exchanges and other safety net programs with a system that works like Medicare Advantage. Risk-adjusted payments will be made to competing organizations. Those who succeed in producing high-quality, effective care would be financially rewarded. Those who fail in this matter will be punished with financial losses.
The first step toward this goal would be for the health policy community to recognize that achieving near-universal health insurance coverage has not created universal access to high-quality care.