Obamacare–The Cosmic Diner Problem

Mickey Kaus Columnist
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Somewhere Joan Walsh is smiling: WaPo‘s Ezra Klein is back on message with a sunny piece on the success story that is Obamacare. It seems premiums are coming in at 16% less than predicted by the Congressional Budget Office, according to this study of early, not-quite-complete data. OK. But here’s my beef with this sort of allegedly reassuring news. Forget that a) the CBO predicted that rates would go up, in nominal terms, though many people will get subsidies to counteract this, and some of the premium increase may reflect better insurance provisions (like mental health care) that consumers may or may not have wanted; and  b) rates (as Klein offhandedly admits**) may still go up dramatically in Year 2,  especially if Obama doesn’t recruit enough healthy young payers into the system. That’s not the beef I’m talking about.

This is the beef I’m talking about: Insurers are competing for customers by promising low rates. They’re achieving these lower rates in large part by restricting the networks of doctors their plans cover. But if insurers offer cheapo plans that give you access to lousy docs–lousier than the ones you are used to–how much progress is that? The study cited by Klein is keyed to the second-cheapest “silver” plan offered on state exchanges. What if this cheap plan is limited to graduates of second-rate foreign med schools? We don’t know. The studies’ authors don’t know. Klein doesn’t know.

At least you’d think Obamacare supporters (I’m still one) should wait until we see whether any consumers choose (and like) these second-cheapest “silver” plans before we claim that their low cost is a big victory. The ‘let’s-see-if-anyone-likes-it’ argument is a point Obamacare supporters like Jonathan Cohn and the Center for Budget and Policy Priorities made when criticizing Republicans who bragged about all the cheapo policies available before the A.C.A. kicked in. It’s an equally good point after the A.C.A. has kicked in.

Maybe the only things that came in ‘lower than what CBO expected’ were the inhibitions of insurance companies when it comes to excluding more competent doctors.

More generally, there seems to be a giant fallacy underlying much of the pro-Obamacare analysis, namely the idea that one doctor is as good as another, and all that really counts is getting Americans to see one of these fungible physicians. Anyone who has had an unusual or complicated disease–or, for most people, a disease of any sort–will tell you this is crazy. It’s as crazy as arguing that all restaurants are alike, so if a food reform program gave you a voucher for a meal at the Cosmic Diner when you were used to Momofuku, that’s “comparable” and you have no right to complain. Hey, you’re getting fed, right?

We have to wait and see if actual consumers like the docs they are getting under the new cheap plans–and what their health outcomes are–before we can decide if Obamacare is enjoying “great success,” no? Even if there’s no adverse selection/Death Spiral that raises the rates in future years.

P.S.: I’m hoping the restaurant analogy will strike home with the A.C.A.’s young Journolistic defenders, a disproportionate number of whom seem to be obnoxious foodies who boast about their meals in tweets.

P.P.S.: It’s not nice to piss off everyone above 400% of the Federal Poverty Line! I note that, even if the pre-Obamacare and post-Obamacare doctor networks are comparable, and a clear majority in the individual market winds up paying less, thanks to subsidies, a reform in which prices go up for the most affluent 40% and down for the (subsidized) poorest 60% is a traditional recipe for political disaster, not success. That affluent 40% have a disproportionate influence, and it doesn’t have to be very disproportionate for them to kill a policy. See Rostenkowski, Dan.


**–“We’ll see if it sticks.”

Mickey Kaus