Monday, August 22, 2016

The Affordable Care Act and the Health Insurance Companies

It occurs to me that the current health insurance kerfluffle, with several major companies withdrawing from the Exchanges in several states, is another instance of the dirty-effing-hippies being right again. "The health insurance companies will be good corporate citizens," "this system will work, no problems."

Yeah, right.

Maybe the big insurance companies really do lose money in some of the Exchange markets. Maybe. I'm not convinced (and this would be an excellent moment for a Congressional committee to subpoena some of their records to find out) but maybe. But they practically wrote that part of the law! If letting them write the law wasn't enough, what would be?


john_burke100 said...

I don't have any evidence and I normally try to avloid conspiratorial thinking, but what if in fact this--a situation that would allow them to back out of the exchanges--was exactly what they had in mind? They're pretty good at foreseeing future events, after all. It would be a nice irony (and, of course, a Good Thing) if this led to the revival of the public option, and I suppose it just might, though I'm not going to hold my breath. Besides, my pre-existing condition makes holding my breath difficult.

Raven Onthill said...

Mmmm … perhaps, instead, they were always planning to ask for additional subsidies. Depending on the depth of the shortfall, these might be either reinsurance from some level of government, or perhaps a relaxation of the medical loss ratio caps.

But perhaps also they just got it wrong. The remark I hear widely is that they overestimated the health of the population in the exchanges, which seems to me entirely possible. And "working the system" is a big nuisance, and a lot of people just don't want to deal, despite the risks and the hefty penalties placed on the uninsured.

The Blog Fodder said...

will this help bring on the public option?

john_burke100 said...

Beats me. Paul Krugman in the Times a few days ago suggested that as one way to respond to this development, but I don't know if that's a sober estimate of real possibility or a bit of cheerleading.

It would be yet another irony if the insurance industry had underestimated the prevalence of sickness, since that's at least partly a result of the high percentage of the public that lacked health insurance before the ACA.

According to the late Ernie deMaio, who was an official of the United Electrical Workers (a "left" union expelled from the CIO in the late 40's), the leaders of the big CIO unions--Autoworkers, Steelworkers, Electrical, Machinists, and a bunch of others--formed a plan, toward the end of the war, to push for catch-up pay increases (wages hadn't kept up with wartime inflation, and the CIO largely observed the no-strike pact) AND universal health insurance. But in 1946, said deMaio, the Autoworkers' Walter Reuther got together with General Motors' boss Charlie Wilson to put together a plan for employer-paid private health insurance; this undermined the unity plan, setting off a race by other CIO unions to get similar deals, and established employer-paid plans as the norm. Then in the 1970s European and Asian car manufacturers started out-competing US ones, in part because the US companies were saddled with insurance contributions while the foreign outfits' workers were covered by nationalized plans.

Raven Onthill said...

If we had a working Federal legislature, there would be hearings and a legislative solution, which might be a public option. As it is, not so much.

Interesting account from DeMaio, thanks John.

I don't love the ACA, but it is an improvement over the nothing we had before, and would prefer to see it fixed, rather than return to that nothing.