Friday, May 31, 2013

Obamacare Train Wreck - Krugman Weighs In [UPDATED]

[Scroll down for updates]

Paul Krugman, economist, may know economic theory but his knowledge and understanding of health care and health insurance put him in the same class with Ezra Klein.

Guys, don't give up your day job.
In some states, like California, insurers reject applicants with past medical problems. In others, like New York, insurers can’t reject applicants, and must offer similar coverage regardless of personal medical history (“community rating”); 
NY Times

Wrong Paul.

Community rating has nothing to do with guaranteed issue.
Obamacare closes this gap with a three-part approach. First, community rating everywhere — no more exclusion based on pre-existing conditions.
You repeat this, which means the first time was not a slip, just ignorance.
 Well, the California bids are in — that is, insurers have submitted the prices at which they are willing to offer coverage on the state’s newly created Obamacare exchange. And the prices, it turns out, are surprisingly low
Define surprisingly low.

He doesn't.

Instead he links to articles from New Republic and Washington Post as his proof that Obamacare will be affordable and no sticker shock.

Both articles factor in subsidies, which may or may not be available. Neither article mentions the skinny networks or the tiny drug formularies, both of which can make the plan difficult to actually use from a consumer standpoint.

Kind of like the Yugo.

Yes, it isn't much of a car but look how AFFORDABLE it is.

Sorry Paul. Not impressed.

THIS JUST IN (from Henry Stern) . . .

 six states with active purchaser policies: California, Massachusetts, New York, Oregon, Rhode Island and Vermont. These are the only six states in the nation that have the power to turn away a health insurer that doesn’t, for example, offer competitive rates–or maybe doesn’t provide a wide enough network.
Washington Post

In other words, The Republik of Kalifornia picks for you.

Just like Obamacare.

If you like the plan you have now, get over it.

UPDATE . . .

And Forbes weighs in as well.

As it turns out the health insurance to be sold in the California exchange excludes some of the best hospitals and the best doctors. Also, the fees paid to providers will not be the same as commercial insurance are paying. They will be somewhere between the commercial rates and Medicare rates. This means that people with exchange acquired insurance will be less desirable to providers from a financial point of view than people in orthodox plans. As the Los Angeles Times explains:

People who want UCLA Medical Center and its doctors in their health plan network next year, for instance, may have only one choice in California’s exchange: Anthem Blue Cross. Another major insurer in the state-run market, Blue Shield of California, said its exchange customers will be restricted to 36% of its regular physician network statewide.
And Cedars-Sinai Medical Center, one of Southern California’s most prestigious and expensive hospitals, said it’s not included in any exchange plans at the moment.

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