Saturday, November 12, 2016

Jared Bernstein — It’s harder than Trump thinks to pull a thread or two out of the ACA.

But speaking of wonkery, let’s take a shallow dive into Trump’s softening on health care, which in at least one key aspect, doesn’t make much sense. He reports that in his meeting with President Obama, the President convinced him that parts of the Affordable Care Act are worth preserving, including the requirement that insurers cover those with pre-existing conditions.
But for that part of the law to work, you need healthy people to subsidize sicker people, as the latter must be covered. That implies mandates and if you mandate coverage, you must have individual subsidies and “community rating” (no individual underwriting; some variation within geo-areas allowed based on age and tobacco use). Without such provisions, the pre-existing condition requirement is meaningless, as insurers will offer unaffordable care to such persons.
In other words, there are lots of interacting, moving parts to the ACA, and it’s hard to pull out one thread…
There are only two simple solutions. Private markets and rationing by risk and price, or single payer. This is one case where the eluded middle holds.

All other solutions are convoluted, which is way health care reform has been so difficult.

On the Economy
It’s harder than Trump thinks to pull a thread or two out of the ACA.Jared Bernstein | Senior Fellow at the Center on Budget and Policy Priorities and former Chief Economist and Economic Adviser to Vice President Jo Biden in the Obama Administration

5 comments:

Matt Franko said...

"you need healthy people to subsidize sicker people,"

Typical....

Tom Hickey said...

This is true in a private system and revenue neutral policy. It's what the individual mandate is about.

Obama took the public option off the table because it was not viable politically owning to "Democrats" like Joe Lieberman.

I said at the time that over time the individual mandate would not be viable political and would be a poison pill for the Democratic Party. How did that work out?

Ryan Harris said...

Get rid of the insurance and expand medicare.

Ryan Harris said...
This comment has been removed by the author.
Ryan Harris said...

Why is the mandate controversial for working age people but not for retirees? Because they trust government to only be a little incompetent, but they know insurance companies, hospitals, pharma and doctors fleece them so they want the power to opt out.