All Commentary
Wednesday, November 16, 2016

This is Your Medical System on Government

The system really is blowing up. It feels like robbery. People are upset.

In the floods of commentary following the election, a gigantic factor is being underreported. Obamacare blew up in the weeks before the vote. It’s one of the great ironies of history that the legislation was called the “Affordable Care Act.” Once it was implemented, we saw several years of sharp increases in premiums, sometimes as much as 50% per year. Insurers sent out millions of notices, just before the election, of coming increases between 20% and 90% starting January 1, 2017.

Keep in mind that people are forced to pay these charges. And often people are afraid to actually use the services they are forced to buy, because the deductibles are so high. And when they do use them, people encounter all kinds of soft resistance from insurers (“we need more documentation”) who are reluctant to pay, because they are trying their best to survive in a world of mandates, bureaucracy, and price controls.

Crack-Up Boom

This is as a decentralized, chaotic, and messy example of a crack-up boom in a single industry. Prices are soaring for services people are forced to buy, even as price controls cause shortages.

Even if you knew nothing else about the current political moment, you would have to predict that this would lead to political tumult.

Look back at the history of political upheavals and how soaring prices for essential services put them into high gear. This was the story of the French Revolution, the Bolshevik Revolution, the American Revolution, and dramatic political shifts in the 20th century: from Weimar to the Third Reich, for example. The lesson is that people don’t like being robbed by the state, and when they can identify the perpetrator and act to punish, they will, even when the results are as bad or worse. 

The Obamacare blowup is hard to understand in detail, because its impact is so disparate. The extent of the price increases depend on your age, location, family status, and employment. The quality of the results depend on what doctors and clinics in your area are willing to accept. After all, you can have the most awesome medical insurance plan in the country, but no medical provider is actually required to accept it. That only adds to the anger.

To get a sense of specifics on the ground, I asked some people on my Facebook page to tell their stories. I received many hundreds of responses. Here are just a few.

Stories from Real Life

“Mine was $237 for high deductible plan up through end of 2014. Forced into “new” plan that was $689 month for 2015. In 2016, premium went up to $917. That too was a high deductible plan (higher than my prior plan pre-2014). Just got my notice that my costs will go up to $1418 in 2017. I am forced to drop a plan that I was forced to buy in the first place.”

“I paid $400 in 2012, $900 now, on a company plan; currently going up to $1,200 and I’m ready to revolt.”

“We (my husband and I) paid $300 a month for a catastrophic plan. We’re self employed and this met our needs. When we stopped paying 2 years ago our premium was $800 a month. We are exempt from the penalty because, based on our income, the IRS says our insurance premium is unaffordable.”

“Between my premium, my out of pocket expenses and my crapshoot prescription coverage I’m now probably averaging $650 a month for the exact same medical care and prescriptions I was paying $100. I’m lucky to be in a position where they money isn’t a huge deal to me. On the other hand, the constant hassles and uncertainty are a big deal.”

“I made more money this year than any other year in my life. This is also the first year my family cannot afford to have health insurance. We can “afford it,” but I’m not willing to pay the equivalent of a second mortgage for something we do not use (and with a $13k deductible on top of that). I only need a catastrophe plan and I’m not allowed to get one. I’ve had affordable HSAs since I was married. But not now. We’re without insurance for us and our two children thanks to the “Affordable Care Act.””

“My company dropped their fantastic plan in favor of a “high deductible” plan because of the tax imposed on so-called “Cadillac plans”. The employee cost of the new plan was higher than the old one that I loved. Now I have to be on my wife’s insurance plan. Her company is based in France.”

“I had to buy a non-ACA compliant plan. So I pay 450/month to have a similar plan that I had before the insurance I had was deemed unacceptable. I’ll be paying the penalty so everyone else can afford healthcare that is deemed acceptable to the government while I can’t afford it.”

“First of all, I’ve paid insurance premiums my entire life. In 2013- We paid $400/ month premium for my healthy family of 3 to have great health insurance, $500 deductible and $25 PC copays. 2014- had a baby, premiums for my family of 4 went up to $600/ month deductible went up to $1000. 2015- premium went up to $800/ month deductible $1500 PC copay up to $40. 2016- $800/ month with less coverage and $3000 deductible. To renew for next year, we only have 1 insurance company offering plans in Oklahoma. Blue Cross and Blue Shield are the only company in the “affordable care act” marketplace for our state. Premiums begin at $1500/ month $6000 deductible.”

“I was paying $40 a month before Obamacare, with Obamacare, I was non renewed twice and in 2016 the premium was almost $300 a month for a higher deductible. I was lucky and able to switch to my husbands group insurance, but my poor mother is paying almost $700 for the worse insurance plan offered.”

“Yes, my 27 year old veteran Marine daughter with 3 kids is paying over $1600.00/mo for their family with a $6000.00 deductible- & she works full time! This is INSANE! How are people supposed to eat?”

“Mine went up from $1,522 to $2,750 per month. Blue Cross/ Blue Shield of Oklahoma.”

“I have an employee provided plan, but our premiums have gone up more than 50% in 2 years and deductible has gone up over 1000% in that time. The real kick in the pants is that due to the ACA our company is now taxed for providing a so-called cadillac plan, whereas prior there was a tax credit so on top of higher healthcare costs for the employees the raises have not been there for the last couple years either, its a double whammy.”

“Having a kid a year ago cost $5000. It’s $15000 here now.”

“Mine was about $70 before Obamacare. Now it is $337.”

“My insurance has gone up about 20% each year for the past 4 or 5 years. AND the coverage has gone down each year: higher deductibles, higher copays, higher out-of-pocket maximums.”

“83% increase here.”

“Last year they made me have 2 plans because apparently my wife and daughter can’t be on my plan! 58% increase!”

“Two years ago I paid $135 a month with a $3500 deductible. Last year it went up to $305 a month with a $6000 deductible. A letter came from my insurance company last month stating that starting January 1st I will pay $609 a month with a $9000 deductible. I’ll be paying the fine next year.”

“$800 three years ago, $1300 for 2017. Bronze, $12000 deductible plus a coinsurince. In 2016 we’ve paid $24,000 out of pocket.”

“I paid $310 per month for health care in 2010. I just received a notice that my premiums will be $2,000 starting in January.”

“I’m studying right now for a new career and planning to leave my job in the spring. I am terrified because I don’t know how to afford coverage without the employer assistance that working for a big corporation grants. I will most likely end up accepting COBRA for the full 18 months at $600+ monthly. I don’t know what I will do after COBRA expires. People like me stay in jobs we hate where we are harassed and abused because we have medical issues and can’t go without health coverage. I’m going to burn through a good portion of the money I have saved just to pay premiums. Previously, I had a catastrophic plan with a relatively minimal deductible and only around $140 per month premium. I truly believe that this health care nonsense drives talented people out of entrepreneurial positions due to the insane cost of being insured and uninsured alike.”

“Our premiums are doubling this year. I hope this is helping a whole lot of people, because i know very few. I just see lots of middle class families being slammed.”

“My brother who lives in Los Angeles, has 2 roommates and works for a small marketing company told me he can’t afford healthcare at all. My in-laws who also live in Southern California and are fairly well off pay over $1400 a month for catastrophic coverage so they typically negotiate fees with their doctors and hospital.”

“I worked as an agent only briefly, and I was frankly surprised by just how much of a hot mess it is. Once open enrollment ended, I had to tell so many people; we can’t help you, and neither can anyone else with an ACA approved plan. Yes, you can send people to the marketplace, but that doesn’t mean they will get insurance there either. The Marketplace still follows mostly the same rules, they have one or two other possible ways to get you insured, but although I forget the specifics, I can tell you that most people needing insurance don’t meet them.”

“I’m a provider and lost another client to this. Their premium is more than their paycheck and it’s better for them to quit their job, not pay a babysitter and their premiums and go on Medicaid.”

“My insurance will go up another $300 in January while the deductible goes from $1000 to $1500. Here is just one source of the racist misogyny that cost Sec. Clinton the election.”

This Annoys People

This is just from my network and one or two networks deep, and randomly from people who saw the post. Of the several hundred who responded, only one person on a big corporate plan (not spouse or children) reported no change.

I could cite another thousand chilling reports from newspapers in the weeks before and the days after the election. This was an incredible mess, one hardly reported on, mostly because reporters have a hard time wrapping their brains around it. And the experiences are so diffuse and diverse, they can’t be characterized in a single number. 

Even before Obamacare, the health care system was not healthy. Coverage was hard to get. It was too expensive. Prescription drug prices were out of control. It was seriously over-regulated and monopolized. Instead of introducing more competition and more market forces, Obamacare went in the opposite direction, with more mandates, price controls, subsidies. Then it broke and blew up in real time, in a way that ruined middle-class family budgets.

The “Affordable Care Act” was the final regulatory blow a fragile system couldn’t handle. And once again, keep in mind that all of this happened in an election year and worsened in the week’s before the election, as the winner condemned the policy and the loser defended it.

If you are looking for a way to understand the most implausible and shocking election outcome in 150 years, you can talk about big ideological issues and cultural shifts, or the rise and fall of big paradigms. Or you could just look at the terrifying reality of what happened to people’s ability to access something so essential to life as health care.