What the NYT Doesn't Get about Health Insurance

On Tuesday, the NYT editorial board penned a piece called "How to Keep People in Health Plans" in response to a recent article about people buying insurance plans on the ACA-created exchanges during open enrollment but then later dropping out.

Here's the gist of the original article, by Abby Goodnough:

About 9.9 million people were enrolled in the federal and state marketplaces at the end of June, a drop of about 15 percent from the 11.7 million who the Obama administration said selected plans during the open enrollment period that ended in February.

Though there is no comprehensive data on why people drop or lose their marketplace coverage, enrollment counselors, health care providers and consumers say cost is a factor. In some cases, people lost jobs or their income dropped after they enrolled. Other people signed up for coverage only to decide later that they could not afford it. Still others dropped their insurance after their federal subsidies — intended to help pay premiums — were reduced or eliminated because the government could not verify their incomes or concluded that they were earning more than they had reported on their applications.

In other words, almost 2 million people are dropping their coverage because of difficulty affording it. As the article also notes, there are currently 10.5 million people uninsured--even though we so often get told that the ACA made health care a "right." 

 

The NYT ed board notes two other reasons for this occurrence:

(1) The fact that many Republican-controlled states have rejected the Medicaid expansion.

For the working poor, layoffs and other household changes can result in big financial setbacks, making it impossible for them to pay even modest monthly premiums. That’s why the health reform law always envisioned having expanded Medicaid coverage to help pick up the tab.

But many Republican-dominated states have refused to expand their Medicaid programs, which would cost them little or nothing through 2016 and not that much more in subsequent years. Under the A.C.A. as interpreted by the Supreme Court, states have the option of expanding Medicaid to provide largely free health care to people earning up to 138 percent of the federal poverty line, or about $33,000 for a family of four, with the federal government paying most of the cost. However, in 20 states that have not expanded Medicaid, poor people are forced to rely on federal subsidies to help them buy private insurance; those subsidies leave many of them exposed to premiums they can’t afford when they lose their jobs or have very little income.

This opens up a clear organizing opportunity for Democrats, but--as Alexander Hertel-Fernandez and Theda Skopcol recently noted in the Democracy Journal--they haven't taken it up:

For example, after helping to push through the Affordable Care Act of 2010, the broad cross-state Health Care for America Now coalition stood down in favor of more limited campaigns to sign people up for benefits and advocate for health-care consumers. For years, the right has treated state-level decisions about building exchanges and Medicaid expansion as major political fights. But the left in general has not recognized that pressing for full health reform implementation in all states presents a huge political opportunity to strengthen citizen faith in government and to further economic and racial equality. Liberals have not pressured legislators or Democratic candidates to talk up health reform the way conservatives incessantly push their politicians to bash Obamacare and block implementation. Strikingly, SiX itself has not made it a top priority to fight for expanded Medicaid in the 20 holdout states, even though these struggles happening right now, from Georgia to Wyoming to Florida to Maine, offer an ideal opportunity to reap political as well as social rewards down the line.

There were several gubernatorial races last year which Democrats lost where they should have campaigned on this much more forcefully. 

But back to the Times...

(2) The fact that the paperwork involved is often confusing, and bureaucracies make this even worse:

One vexing problem is that many people are confused by the various notices telling them what information they need to submit to obtain subsidies. Some 423,000 people in 37 states that use the federal marketplace lost their 2015 coverage because they failed to document their citizenship or immigration status, and 967,000 households had their subsidies recalculated because of discrepancies in their original reports of household income. Often, problems arose because people failed to submit their Social Security numbers.

So what solutions does the New York Times propose? 

 

(1) Simplified messaging: "The Obama administration has been simplifying its messages to make enrollment easier." However, the necessary paperwork will likely still be burdensome.

(2) Expanding Medicaid: "States that have not expanded Medicaid should do so to help their own low-income citizens, but the Republicans in those states would rather have their residents suffer." See my earlier point about the Medicaid expansion.

(3) "Stronger outreach efforts by enrollment counselors might also help people understand what documentation they need to provide." An admission of the burdensome nature of the paperwork required.

(4) "But if people were given more information about the penalties at the start of the enrollment season on Nov. 1, those who can afford to pay premiums might have even greater incentive to enroll." In other words, remind people that you are going to fine them for not having enough money.

#1 and #3 are fine so far as they go, which is not very far. I already spoke about #2. And #4, to me, just underscores the fact that fining people for not having enough money is counter-productive.

What the NYT ed board does not even consider is that there might be fundamental flaws in the design of the Affordable Care Act. The ACA, despite its various strengths, still leaves intact our private, for-profit system.

The best way, then, to "keep people in health plans" would be to provide universal coverage for all via a government-run and financed health insurance plan--expanding Medicare to the whole population. It would eliminate the cost barrier and the excessive paperwork barrier, improving both economic and administrative efficiency.

Making the ACA work better is, of course, an important short-term goal. But Congressional Democrats said that it would just be a "starter home," and we have to hold them to this and aspire to something better. Without universal provision, people will still fall through the cracks.