ACA exchange plans cost near-poor more than Medicaid

The Commonwealth Fund just released an interesting brief regarding the effects of failing to expand Medicaid on the health care costs of people between 100 and 138 percent of the poverty line.

Yes, that sounds about as exciting as watching paint dry, loyal readers (both of you) but it’s important – so wake up, dammit!

Here’s the score:  the Affordable Care Act expands Medicaid to cover everyone under 138 percent of the poverty line. The problem is that 19 states – generally dominated by Republicans – have

refused to expand their Medicaid programs. This poor public policy has created a “Medicaid gap” consisting of people who are too rich to qualify for legacy Medicaid (in Texas, for example, parents earning more than 15 percent of the poverty line – about $2,400 a year for a family of 2 – don’t qualify) but too poor to qualify for subsidies on the health insurance exchanges, which are available to households earning between 100 and 400 percent of the poverty line.

The 3.2 million people in this gap have no functional access to insurance, since there’s no way a person making, say, $10,000 a year can afford several hundred dollars a month in health insurance premiums.

People earning between 100 and 138 percent of the poverty level in non-expansion states are considerably better off though, because they qualify for both premium subsidies and cost-sharing subsidies for exchange plans. The indispensable Charles Gaba has estimated this group at roughly 1.9 million people.

But do the exchange plans stack up favorably with the generosity of Medicaid for poor people?

The good scholars over at Commonwealth Fund set out to find out. And their general answer is “no.”

Follow me below for more details.

Transitional plans and insurance exchanges II

One day after my last post, the New York Times ran an article on Geisinger Health, an insurance company requesting a large rate increase on the PA exchange. One reason why? Because the transitional plans are keeping considerable numbers of healthy people out of the exchanges. It would have been nice if the article had mentioned it before three paragraphs from the end.

Are transitional insurance plans driving losses on state exchanges?

The ACA's insurance exchanges have generally been successful in helping to reduce the ranks of uninsured in the United States, while providing reasonable quality insurance to its policyholders.

However, several challenges still remain. Most notably, a good number of insurers have had problems with breaking even on the exchange products (though some are making money). That stems from several problems, notably Marco Rubio blowing up the risk corridor reinsurance program that undermined many insurer's business plans, especially non-profit co-ops trying to break into the market. Other insurers, like United Health, have just tended to be bad at competitively designing and pricing plans.

However, the risk pools for the exchanges have also proven to be somewhat older and sicker than predicted, which has also tended to drive up prices in 2016 and will likely do so more in 2017. I haven't seen a great explanation for this other than "predicting new risk pools is hard," -- which it undoubtedly is.

However, the New England Journal of Medicine last week featured a very interesting Perspectives piece (gated unfortunately) by John Hsu that fingers grandmothered plans as the culprit.

Two-tiered justice

On the recent Stanford rape case, I think Scott Lemieux makes a valuable point that helps clarify something I've been struggling with: does asking for a stronger sentence for a privileged person who has gotten off lightly undermine the broader push to make the U.S. criminal justice system less punitive?

Lemieux argues that it doesn't. Indeed, he suggests that the two are complementary goals: If you hold privileged (read: white and rich) defendants to the same standards the you hold underprivileged ones, people with power won't be able to ignore how draconian the system is and push to change it, instead of being able to close their eyes to it because those close to them escape its clutches. Think about the differences in the ways we've treated the opioid addiction problem and cocaine (abused broadly by middle and upper-class whites) in comparison to the way we treated the meth, heroin and crack problems (used disproportionately by the poor and/or minorities).

Finally, good on the survivor for her statement to the court and defendant during the sentencing. I have much respect for her.