Tag: Risk
What Republicans and Democrats Don’t Understand About the Insurance Company “Bailout”
Last week I testified before the House Oversight committee on the “risk corridors” in the (ObamaCare) exchanges. Republicans claim that this is a device to bail out the insurance companies. Democrats, in the unusual position of defending the insurance companies, actually claimed that the government was going to make a “profit” because of it....
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Will the Federal Government Turn a Profit on Risk Corridors? That Can Be Stopped.
I have written twice about the “risk corridors” in Obamacare’s health-insurance exchanges. The first post described how risk corridors will work in the exchanges. Risk corridors exist for three years and are designed to partially immunize insurers from losing money in the exchanges. Recently, the risk corridors have been described as a “bailout,” especially...
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Is There an Argument—Any Argument—for Community Rating?
I’ve never seen an intelligible argument for community rating. I think I know why. I’m afraid there isn’t any. Don’t believe me? I’ll tell you what I’ll do. I let you pick any recognized ethical system in the entire history of Western philosophy. (Only Western? Yeah, we’re not cultural relativists here.) Altruism, Egoism, Nietzschean...
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Will Republicans Repeal Obamacare’s Risk Corridors?
This blog’s readers are better informed than most about the (somewhat complicated) question of how health insurers will be compensated for bearing risk in Obamacare’s health insurance exchanges. A previous entry explained the basics of two of the three programs that protect health insurers from losing too much money on Obamacare’s exchanges. These are...
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Obamacare Risk Adjustment: Moving the Goalposts
As noted in a previous blog entry, the Obama administration has ways to partially immunize health insurers from losing money in Obamacare’s exchanges. A later entry proposed that early results of open enrollment for Obamacare, which began on October 1, suggest that health insurers will require a bigger bailout than originally anticipated, and the...
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The Median Voter, the Marginal Consumer, and Obamacare: Why No Politician Competes for the Votes of Patients with Bladder Cancer
On October 30, President Obama gave a now infamous speech celebrating the going out of business of so-called “bad apple” insurers. According to the President, “before the Affordable Care Act, these bad apple insurers had free rein every single year to limit the care that you received or used minor pre-existing conditions to jack...
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A Woman May Die Because of Obamacare
For the past 20 years I have been trying to convince my colleagues in the health policy community that managed competition contains perverse economic incentives. These incentives do more than misallocate resources. They create ominous risks for the health and safety of patients with serious medical conditions. Consider the editorial in Monday’s Wall Street...
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The Selling of Obamacare
It’s as though two completely separate conversations have been going on. From day one, the health policy community has correctly seen the Affordable Care Act as an attempt to completely change the health care system. This isn’t even controversial. It’s accepted by all as an undisputed fact. However, no one has ever said this...
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Death Spirals
A death spiral occurs when pricing in an insurance market spins out of control. If an insurance pool turns out to be more expensive than originally thought, the insurer must raise its premiums. As the premium rises, some healthy people drop their coverage. With a sicker group of enrollees, the average cost per enrollee...
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Doctors Should Help Patients Weigh Tradeoffs
One theme of my book, Priceless: Curing the Healthcare Crisis, is that the third-party payment system has caused major harm by distorting the price system and thereby undercutting our ability to evaluate alternative courses of action. This problem is fundamental, but there are others as well. Another problem is the taboo against doctors helping...
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