Obamacare Is Experimenting on Us (Does That Make Us Frankenstein or Fusilli?)

(Photo by Joe Raedle/Getty Images)

Obamacare is a large, unwieldy law. Despite its complexity, most people are familiar with its most important elements. They know it created a marketplace where people can shop for healthcare insurance; many are even aware that the cost of that insurance is subsidized for people with lower incomes. Others realize that Obamacare encouraged states to expand Medicaid. And of course, almost everyone has heard of the now defunct individual mandate which required people to purchase insurance or face a tax penalty.

But most Americans probably aren’t aware of what, in the long run, could turn out to be the most impactful part of the Affordable Care Act. The crafters of the ACA recognized that the science of healthcare delivery hadn’t advanced far enough to identify the best ways to improve healthcare quality while lowering healthcare costs. So, lawmakers set a slew of experiments in motion, designed to test ways of accomplishing these goals.
Results of those experiments have been coming out of the lab lately, raising the question of what kind of creatures Obamacare has been creating—are they like Frankenstein’s monster, terrifying but misunderstood? Are they like Edward Scissorhands, loved by suburban moms until they realize how dangerous he is? Or are they like a less renowned creature—Fusilli Jerry, the pasta stick figure that Kramer made for Jerry Seinfeld on that eponymous 1990s sitcom?
I side with the latter, because I view the Obamacare experiments as a type of pasta-flinging exercise. People at CMMI, the federal agency in charge of running these experiments, have been cooking up a bunch of ideas, throwing them into a pot, pulling them out one at a time, and then flinging them against a metaphorical wall to see which ones stick—which ones are ready for public consumption. Some relatively recent studies serve as a good introduction to what Obamacare has been cooking up for the American healthcare system.
(To read the rest of this article, please visit Forbes.)

Bait and Switch: The Sneaky Way Your Employer Just Passed Healthcare Costs onto You

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If you get health insurance through your job, beware: you might be picking up more of the cost of your medical care than you realize. With increasing frequency, employers are directing their workers to the kind of high deductible, high out-of-pocket insurance plans that leave workers financially responsible for a surprising portion of their healthcare expenses.

Not long ago, having insurance coverage meant your costs were largely covered. Americans could count on their employers to offer health insurance plans that covered the vast majority of their healthcare expenses. What’s more, employers even chipped in generously to cover a good chunk of people’s monthly premiums. As a result, Americans with good jobs could live their lives unafraid that they would be financially devastated by an unexpected acute illness.

But this generosity came at an increasingly unaffordable cost for American companies, with the price of health insurance threatening their bottom line. In response, companies have looked for ways to get their workers to pick up more of the tab.

Enter high out-of-pocket health plans.
On the surface, these plans look like bargains, because they cost less each month than other plans. When signing up for insurance, many people are attracted to these plans, knowing they will have less of their take home pay diverted to an insurance company. But then they discover that even a minor illness can turn that bargain to a burden.
(To read the rest of this article, please visit Forbes.)

Everyone Agrees Obamacare Prices Have Been Rising Rapidly (But Everyone Is Wrong)

(Photo by Joe Raedle/Getty Images)

It has been well publicized that premiums for Obamacare insurance plans have been rising at a disturbing rate. Local news is filled with reports of 21.5%36.3% and even higher price hikesPresident Trump complained in February that Obamacare premiums “have increased by double and triple digits,” even remarking that premiums in Arizona “went up 116% last year alone.”

If the cost of buying insurance were really rising this rapidly, we’d have a reason for bipartisan agreement that the Obamacare insurance experiment is a failure. But the rise in Obamacare premiums isn’t even close to the magnitude we are hearing about from reporters and politicians. And it is not because of fake news or dishonest discourse. It’s because everyone is looking at what’s for sale rather than what’s being sold.
Not sure what the heck I’m talking about? Then consider the Nike Mag 2016, a sneaker touted as “sensing the foot and lacing itself,” because, you know, it is so exhausting to tie your own shoes. Nike made less than a hundred pairs of these battery-powered, motor-driven sneakers, which now sell for an average of $26,000 a pair.
Suppose, for purposes of illustration, that before the Mag came to market, Nike had five lines of basketball shoes on the market. They sold for an average price of about $200. Then in 2016, it brings out the Mag. If healthcare reporters and politicians commented on these shoes, they would tell you that Nike prices have risen more than 2,000%. That’s because they’d be calculating the average price of Nike’s shoe offerings, as if people bought an equal number of each type of shoe. If you have five varieties priced at around $200 and one that’s priced at $26,000, you’ll have an average price of over $4,000.
But that’s an insane way to describe the price of Nike basketball shoes. To know how much their basketball shoes cost, on average, we need to know what shoes people actually buy. With hundreds of thousands of people buying the $200 sneakers and a handful of people buying $26,000 sneakers, the average price of Nike’s shoes won’t be much more than $200.
(To read the rest of this article, please visit Forbes.)

How Companies Can Save Millions on Healthcare Benefits (without Harming Employees)



The free market is supposed to be efficient. Yet employers are throwing away hundreds of millions of dollars, by not giving their employees intelligently designed healthcare benefits that encourage them to shop for affordable lab tests.
Right now, when your doctor orders a CBC (complete blood count) and a basic chemistry panel (checking your sodium, potassium and other fun chemicals), you probably walk down a hallway and get your blood drawn, or maybe you go to the nearest testing site. A pleasant nurse draws several vials of blood from your arm, and eventually you and your employer get a bill in the mail for the cost of your tests. You probably don’t shop around for prices. Yet those tests might cost $30 at one laboratory and more than $100 at another. Who pays that extra $70? A good chunk of that tab will be picked up by your employer, which ultimately makes it harder for your boss to give you a raise. And some of the cost might be on you, with a copay or a charge to your deductible.
There’s got to be a better way.
(To read the rest of this article, please visit Forbes.)

Another Obamacare Failure: It Wasn't a Job Killer!

According to many conservative pundits, Obamacare is a job killer. Five days before Obama signed the law, in fact, speaker John Boehner declared that the president was pushing “his job killing government takeover of healthcare that will hurt small businesses.” Years after the law was passed, critics continued trumpeting this theme, Ted Cruz calling Obamacare “the biggest job-killer in this country,” and even claiming that “millions of Americans have lost their jobs” because of the law.

Are the critics right? Liberals point to steady national job growth since passage of the law as evidence that Obamacare has not killed jobs. Conservatives point out that, for all we know, job growth would have been even higher had Obamacare not become the law of the land. Both sides are caught in a rhetorical standoff, seemingly with no way to confirm or refute either side’s argument.

Fortunately, social science gives us ways to move beyond data-deficient arguments to something more substantial. In the case of Obamacare, a strange twist in the law has given social scientists an opportunity to study a natural experiment. That experiment relates to the expansion of Medicaid that was written into the law, an expansion that was supposed to be mandatory for all states. Medicaid is a program jointly run by the government and individual states to provide healthcare coverage to low income people. After Obamacare was passed into law, the Supreme Court ruled that this Medicaid expansion cannot be mandatory, and gave states the option of deciding whether or not to expand their programs. This variation in expansion is what allows policy analysts to study this natural experiment.

Here’s the basic idea: If Medicaid expansion kills jobs, then all else equal, states that expanded Medicaid should have worse job growth than those that did not. For instance, Medicaid could reduce people’s incentives to work, because they no longer need jobs to pay for healthcare coverage. Or it could kill jobs by increasing federal and state taxes, thus leaving Americans with less money to invest in the economy. To test out the effect of Medicaid expansion on employment rates, Angshuman Gooptu and colleagues compared employment rates before and after the Obamacare Medicaid expansions went into effect, and compared these before and after differences in states that did and did not expand Medicaid eligibility. This is what is known as a difference in difference analysis or, as the cool kids call it: “diff in diff.” In studying employment, the researchers focused on low income workers, the ones most likely to be affected by Medicaid expansion.

(To read the rest of this article, please visit Forbes.)

PeterUbel