Tuesday, August 30, 2016

Dumas: Behind the Obamascare headlines

Posted By on Tue, Aug 30, 2016 at 10:00 AM

Ernest Dumas explains in his Arkansas Times column this week how Obamacare's problems can be fixed; why it isn't going away, and, most pertinently, why it's more lucrative for Arkansas to continue to expand the coverage pool, not dream up ways to shrink it.

By Ernest Dumas

If you just read the headlines you would think that Obamacare is on its last leg, a national train wreck even in Arkansas, where Republicans and Democrats preserved its biggest feature, assured medical care for the working poor.

A few insurance companies aren't making enough, or any, money off the policies sold on some Obamacare exchanges, because too many sick people and too few healthy people are buying policies. They are pulling out, leaving less competition in many places.

The latest news about the astonishing success of Arkansas's novel twist on Obamacare's Medicaid for the poor—the soon-to-be renamed Private Option—translated into bad news, because, its critics say, so many Arkansans have signed up for subsidized insurance that it will bankrupt the treasury when the state starts paying a share.

Because the program seems unsalvageable, maybe prayers for the death of Obamacare will be answered after all come January, when a new president and Congress take over.
Alas, it won't happen, even under the unlikeliest circumstance: President Donald Trump and sizable Republican majorities in both houses. They would nominally repeal the law and replace insurance for 17 million Americans with—what? Like Bernie Sanders, Trump promised guaranteed insurance for everyone, adding 27 million more people to the 17 million insured by Obamacare.

But changes are coming, principally in nomenclature if the Republicans prevail. If Hillary Clinton and Democrats win, there will be changes to expand coverage and stimulate competition, perhaps by allowing the federal government to offer policies and other features that were in the House of Representatives bill that would have passed in 2010 had a death in the Senate not forced Congress to take the Senate bill.

Let's look at the state and national developments separately.

Arkansas's Private Option—letting the poor get commercial insurance on the Obamacare exchange instead of direct government medical aid—was a Republican idea, but by 2015, when Gov. Hutchinson took office, it had been branded as socialism like Obamacare itself. So he tinkered to make it a little harder and costlier for the very poor to get coverage and renamed it Arkansas Works. The Obama administration will soon give him a waiver to do several of those things, but it demands that if the state is going to run the exchange, as Hutchinson is asking, it must use some federal money to help people navigate the daunting signup process, which the legislature in 2013 prohibited.

Last week, a few Republican legislators complained that the huge success of the Medicaid expansion—more than 325,000 Arkansans whose earnings are below or barely above the poverty line are covered—would break the treasury after the state starts paying part of the premiums. Instead of helping more people get medical care, one leading Republican legislator said, Arkansas should find ways to get them off the rolls and eliminate some of their coverage. Even the governor feared rising costs.

What no one dared explain was that, as far as the state treasury and Arkansas taxpayers are concerned, the wider coverage the better. After the state starts paying 10 percent of Medicaid in 2020, the treasury will be fatter and Arkansas taxpayers far better off than if the program had never started. The legislature's business consultants told it so.
Nationally, the insurance industry was prophetic when it warned Congress in 2010 that the law's subsidies and tax penalties for people who insist on not being insured were not big enough to guarantee a healthy market. It predicted that younger healthy people would wait until they got sick before buying the policies. The administration helped some by making it harder for people to buy insurance midyear when they got sick.

The big problem was that Congress had to take the Senate bill rather than the House bill, which had higher subsidies for the poor, direct premium subsidies rather than complex tax credits, and provision for a public option to compete with commercial companies.

But those can be remedied next year, by adjusting subsidies, raising the ceiling for government aid above 400 percent of poverty, fixing the tax penalties and allowing a government option on the exchanges.

Meantime, the problems obscure Obamacare's benefits—a shrunken federal deficit, medical protection for 17 million more people and vastly improved health, especially in the 31 states that expanded Medicaid to all the working poor. A check on current disability rolls shows that the decline in disability enrollments since the law was passed continues, nationally and in Arkansas—way down even from the prosperity peak of the George Bush presidency in 2006.

We could be Texas. It responded to Obamacare's passage by refusing Medicaid expansion and slashing family planning and pregnancy coverage for poor women. A medical journal reports that pregnancy among poor women rose and maternal mortality rates quickly doubled to near third-world rates.

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