November 19, 2013

PPACAo2010HSOTD

Nope, not a horror story! Everything is great! You guys stop hyperventilating!

One of the most important changes in the law is a huge collection of bureaucratic nudges designed to incentivize the health-care system toward delivering higher value rather than churning out higher cost. That experiment, while still extremely early, is going far better at this stage than even the most optimistic advocates hoped. A wave of innovation is in full bloom, manifesting itself in such things as lower rehospitalization rates, rapid growth of accountable care organizations and retail health providers, and employers shopping around for less expensive plans rather than endlessly footing higher bills. -- Jonathan Chait

Hat-tip: Jim Geraghty

ACA Horror Story of the Day Posted by John Kranz at November 19, 2013 10:11 AM

HAHAHAHAHAHAHA-

Take, say, the police. Police departments across the country are constantly beating up innocent people and letting criminals run wild. There will never be an end to stories of police corruption and incompetence. But most people simply take stories like that as reasons to try to make the policy work better, not as arguments that having a police department is a conceptual failure.

O-care is good! Sure, some innocent people will get beat up and some corruption and incompetence will run wild, but that doesn't mean that making college students pay high-risk pool insurance rates is a conceptual failure.

Posted by: johngalt at November 19, 2013 12:22 PM

Democratic strategist Steve McMahon was on Kudlow last night (looks like this particular clip did not get posted). He bravely fended off the show's host, a guy from Manhattan Institute, and Holman Jenkins from the WSJ Ed Page.

But he kept repeating "this is how insurance works! It distributes risk!" I was jumping out of my chair for one of the others to correct him: insurance prices risk. Somebody did comment that car insurance prices differently to good drivers.

But I think a full throated defense is required that insurance is not a wealth distribution scheme, but rather a derivative trade on risk. I don't think that was the last time we'll hear McMahon's incorrect generalization.

Posted by: jk at November 19, 2013 12:46 PM

Well said. Now, what is your argument against "distributing" risk? After all, being a good driver is a choice while having poor health "just happens." ;)

Posted by: johngalt at November 19, 2013 2:38 PM

I'm just looking for transparency, like my socialist, income-redistributing blog brother:

The idea I think TG and I share is this: If we're going to use the power of the state to take stuff from some people and give it to others, let us insist that it be explicitly recognized as such. And do it directly, without the package-deal of government management of this or that program. Just give them cash, i.e. "Uncle Sam's Allowance" and turn them loose in the free market.

I'd say that there exists a fair, actuarially-supported price to insure each American against future health care expense. Charging the nonvoting young more to subsidize a lower price for their more-likely-to-vote elders is wealth redistribution. To compare that to the primary function of insurance is specious.

Posted by: jk at November 19, 2013 2:58 PM

So in a similar vein health insurance really should be priced based upon your age, gender, and medical history and then, if you "can't afford it" you can apply for a state managed subsidy computed based on your income and scheduled to be proportional to how many continuous years you have been insured. So the bigger subsidies go to those with the highest medical costs, lowest incomes and, importantly, those who maintain coverage.

The hardest sell there, as I see it, is what to do when the poor and sick first sign up. "Keep paying now, it'll go down in future years" is not a politicians dream line in stump speeches. Then there are the actuarial realities.

Posted by: johngalt at November 19, 2013 7:41 PM

That's the Kudlowite, Reaganite, and Friedmanite position -- who am I to argue with a holy trinity?

Give the poor and uninsurable vouchers to purchase insurance on the private market, but fer cryin' out loud, leave the private market alone.

I find contiguous coverage to be the ultimate solution. But until we remove the tax preferences for employer-funding it is immoral and uneconomic to demand it. When most get their insurance from their employer, you cannot hold them responsible for maintain coverage.

But if you fix the tax preference (like McCain's awesome health care plan that he campaigned on but did not understand well enough to debate), then demanding continued coverage fixes most of the problems ObamaCare was created to fix.

Posted by: jk at November 20, 2013 11:41 AM | What do you think? [6]