Wednesday, December 9, 2015

Political Sabatoge - Everyboby Loses

A NYT article from 12/9 explains how Marco Rubio has quietly undermined the ACA and is  responsible for higher health care premiums, for plan cancellations, and for some insurers to close their doors.  Yet, he continues to be praised by the very same people he's giving the shaft.  Why?  In my opinion, the lack of basic economic literacy.

Insurance companies adjust rates based on the pool of people they insure.  If that pool is expected to use more health care, premiums rise.  In the first few years of the ACA, without strong incentives for the healthy and financially capable to sign up (because the opposition watered down the penalties), only those uninsured and in poor health sign up.  The purpose of the "temporary" reimbursements to insurers referenced in the article is to offset these risks and uncertainties through 2016, otherwise insurers would have had no choice but to set very high rates in anticipation of a less healthy- more expensive- pool.  If that were to happen, then adverse selection would lead to the end of any effort -the vast majority of Americans supported- to provide uninsured citizens with basic health coverage.  

Rubio and his fellow Republicans, betting that they understand basic economics better than their supporters, killed the provision to reimburse insurers for anticipated adverse selection problems.   Their actions are nothing more than political sabotage.  Killing the provision has ZERO economic merit and does nothing but shift the cost of adverse selection from "taxpayers" to health care consumers - who are the same people!   Rubio and his colleagues are willing to throw everyone under the bus, calling it "saving the taxpayer" hoping to fool the uninformed without ever offering any acceptable policy or reform to make it better.  Many conservatives reading this article, quick to blame Obama and the ACA for the cancellation of plans, higher out-of-pocket expenses, and insurers going out of business, are playing the fool.  Few of Rubio's supporters have any idea how they are being used to only support a political power grab, while still paying for it all in the end (pun intended).

Marco Rubio Quietly Undermines Affordable Care Act

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