On the heels of Carol Shea-Porter voting for the “Upton bill” on Friday (November 15th), one of Ray Buckley’s henchmen (hence the term “Buckleybot” in the title to this post), Dean Barker, has been blogging here and here that the Upton bill is actually a “progressive” bill.
Let’s start with a brief explanation of the Upton bill. It’s like the “fix” announced by Obama to Obamacare on November 14th in response to the millions of individual health insurance policies, over 5 million at this point, cancelled because (1) these policies do not meet Obamacare’s minimum standards and (2) fall outside Obamacare’s “grandfather” rule and, therefore, are illegal to sell beginning January 1, 2014. Both Obama’s “fix” and the Upton bill “allow” insurers to continue selling existing health insurance plans in 2014 that would otherwise be prohibited by Obamacare beginning January 1, 2014. The difference is the Upton bill allows anyone to buy those plans, while Obama’s “fix” only applies to those with existing or recently cancelled plans. It is important to understand that both Obama’s “fix” and the Upton plan only apply to 2014.
It is widely understood that Obama’s “fix” was intended to avoid the embarrassment of scores of House Democrats voting for the Upton bill, which was already scheduled for a vote on the following day. Nonetheless, 39 Democrats including Carol Shea Porter and Annie Kuster voted for the Upton bill.
Now on to Barker’s dissembling. Barker, whose intended audience is his “fellow progressives,” claims that the reason a “fix” is needed to Obamacare is because Millenials didn’t understand their health insurance was “junk” and that it would cost more to get “real” insurance, and they now find themselves unable to afford “real” insurance because of the crappy economy. Total hogwash.
Let’s start with the distinction that Barker makes between “junk” insurance and “real” insurance. We were told over and over and over again by Obama and many, many other Democrats that Obamacare allowed us to keep our health insurance plans, if we liked them. There was nothing about, “if you like your health insurance policy and as long as it’s not junk, you can keep your health insurance policy.” Roll the tape:
It’s not that people didn’t understand that their existing health insurance was “junk,” as Barker contends, it was that they were implicitly told just the opposite by Obama and the Democrats.
Barker is also dissembling, or he doesn’t understand how Obamacare works, when he harrumphs that Obamacare is “real” insurance. Actually, by any objective standard it is Obamacare that is “junk insurance.” What makes Obamacare junk is that everyone, no matter what his or her situation, has to buy what Obamcare calls “essential coverage.”
But maternity coverage or pediatric dental care is hardly “essential” to a sixty-something year old couple. It is a waste of their money. Similarly single-male Millenials don’t need maternity coverage. The vast majority of them don’t need diet counseling, another Obamacare essential coverage, either. It is similarly a waste of their money. But under Obamacare it is illegal for an insurance company to sell sixty-year olds or single-males insurance that does not offer maternity coverage or pediatric dental care.
Forcing everyone to buy “essential” coverage, which as just shown is actually useless to many, is income redistribution. Obamacare forces some to pay for certain types of health insurance coverage that they neither need nor want so that this coverage can be offered more cheaply to others.
The “sticker-shock” at the cost of Obamacare results from certain segments of the population being forced to purchase insurance that they neither need nor want in order to subsidize these types of coverage for others. And, of course, what Barker omits is that we were told over and over and over again by Obama and many, many other Democrats that the price of health insurance would go down under Obamcare. Roll the tape.
Now let’s turn to Barker’s assertion that the Upton bill “fixes” or “improves” Obamacare. Again, Barker either is dissembling or he just doesn’t understand how Obamacare works.
It is self-evident that insuring those with preexisting conditions and older Americans costs more than insuring younger/healthier Americans. What Obamacare does to make insurance affordable to those with preexisting conditions and older Americans is to limit the difference that insurance companies can charge between the former and the latter. Insurance companies may not charge those with preexisting conditions and older Americans what actuarial calculations say they should be charged to cover what it costs to insure them, but rather limits the price to a multiple of what the younger, healthier are charged.
Because premiums collected must exceed claims paid (else insolvency), Obamacare’s price-caps result in the younger/healthier, or as Barker puts it Millenials, paying more than what their Obamacare policies are worth to them in order to subsidize insuring older Americans and those with preexisting conditions.
Without sufficient Millenials buying insurance on the Obamacare exchanges, the insurance companies go into what is called the “death spiral.” That is, if the only people purchasing insurance on the Obamcare exchanges are those with preexisting conditions and older Americans, the premiums collected do not cover the cost of care, which makes the insurance companies insolvent.
This, of course, is why Obamacare contained an “individual mandate,” which of course is why the insurance companies supported Obamacare. Young, healthy people would be forced to purchase overpriced insurance to pay for the cost of insuring those with preexisting conditions and older, less healthy people.
The “grandfather” rule was intentionally written so that Americans would lose their existing health insurance and be forced into the Obamacare exchanges. This had to happen for Obamacare to work. Thus, the Upton bill is not a “fix” to Obamacare at all. It actually undoes Obamacare’s method of subsidizing health insurance for those with preexisting conditions and older Americans, albeit only for one year. Were it to be extended indefinitely and extended to employer-provided insurance, it would effectively repeal Obamacare:
The foregoing begins to make clear that another claim by Barker, that the “goal of the Affordable Care Act is to insure the uninsured with affordable care,” is also dissembling. But that is for another post.
The point here is that Barker is dissembling when he claims Carol Shea Porter’s voter for the Upton bill was based on “progressive” principles and not political self-interest.