The Obamacare 'Death Spiral' Reinterpreted

Philip Klein parses the “death spiral” scenario, where the individual market tanks “if insurers are stuck with a disproportionate number of older and sicker enrollees with high medical claims without a sufficient number of younger and healthier participants to offset the costs.”

“What’s been largely lost in the ongoing discussion … is that there isn’t one Obamacare ‘risk pool’ and thus, there isn’t one potential ‘death spiral.’ In reality, there are 51 different risk pools (for each state plus the District of Columbia), which means 51 chances to get things right, as well as 51 possible death spirals.”

“Under such a scenario, in which there are a certain number of state-based death spirals, insurers may simply choose to exit the individual market in under-performing states.”

“Such a set of circumstances could scramble the current health care policy debate.”

With Republicans unable to repeal Obamacare and Democrats struggling to “dig in” amidst the collapse of individual markets, “this could produce a result under which Obamacare remains the law of the land, but states are given more flexibility, even the ability to opt out of the program.”


Obamacare Penalties Eased

In an unexpected move, the Obama administration announced Thursday a further easing of rules under Obamacare for those consumers facing cancellation of their insurance.

The Washington Post: “This second change, prompted by a group of Democratic senators — most of whom face tough reelection campaigns next year — goes substantially further in accommodating people upset about losing their policies. The latest rule will allow consumers with a canceled health plan to [avoid a penalty and] claim a ‘hardship exemption’ if they think the plans sold through new federal and state marketplaces are too expensive.”

“The exemption gives them the choice of having no insurance or of buying skimpy ‘catastrophic’ coverage.”

Ezra Klein: “This puts the first crack in the individual mandate. The question is whether it’s the last. If Democratic members of Congress see this as solving their political problem with people whose plans have been canceled, it could help them stand against Republican efforts to delay the individual mandate. But if congressional Democrats use this ruling as an excuse to delay or otherwise de-fang the individual mandate for anyone who doesn’t want to pay for insurance under Obamacare, then it’ll be a very big problem for the law.”

McCain: Plan to Repeal Obamacare Will Save $2.4 Trillion

Claiming that his plan would save taxpayers trillions of dollars, Senator John McCain (R-Ariz.) introduced a legislative alternative to the Affordable Care Act.

The National Journal: McCain “cited low public opinion of Obamacare, ‘redistribution of wealth,’ a ‘destructive’ tax on medical devices, and the disappointment for Americans who have received  cancellation notices among his many reasons for introducing the legislation.”

“McCain said his alternative would save the United States $2.37 trillion over the first decade.”

A $500 Million 'Bet' That Obamacare Works

Matthew O’Brien writes that insurance companies have recognized in the “young invincibles” a potentially lucrative new market and are preparing an “ad blitz” to reach this demographic that doesn’t “think [it] needs coverage.”

“Insurers are set to spend $500 million on local TV ads next year—more than double what they spent in 2012. WellPoint alone is going to drop $100 million on all advertising by the end of this year.”

“But this isn’t just about convincing young people to buy insurance. It’s about convincing young people to buy their insurance. Because those young people are probably going to buy it, just at the last minute.”

In short: “Insurance companies are making a half a billion dollar bet that Obamacare will work, disastrous rollout notwithstanding.”

Obamacare Poll: Uninsured Skeptical of Benefits

The latest New York Times/CBS News poll reveals that Americans’ disapproval of Obamacare is still high, whether the respondent is insured or uninsured:

  • 53% of the uninsured disapprove of the law, while 51% of the insured disapprove of the law.
  • A third of the uninsured say the law will help them personally, but about the same number think it will hurt them, with cost a leading concern.
  • Approval of the law has improved from November’s low of 31% and is at 39%; disapproval is at 50%.

“The widespread skepticism, even among people who are supposed to benefit from the law, underscores the political challenge facing the Obama administration as it tries to persuade millions of Americans to enroll in coverage through new online marketplaces, a crucial element of making the new law financially viable for insurers.”

Although most agree that it hurts the country when individuals don’t have insurance, and only a minority (37% of the general public, and 33 % of uninsured) see the law as so flawed it should be repealed, “uninsured Americans — precisely those it was meant to help — remain confused about it and fearful that it will increase their health care costs.”

Americans Prefer Obamacare to a GOP Alternative

Aaron Blake and Sean Sullivan reveal Obamacare’s silver lining:

“Despite the country’s opposition to the Affordable Care Act and Obama’s leadership on it, it doesn’t want to turn the reins over to Republicans.”

According to a recent Washington Post-ABC News poll, when respondents were asked “whether they would rather see Obama or the GOP in charge of that implementation, 42 percent pick Obama, while 37 percent pick Republicans.”

“The GOP’s laser-like focus on repeal — and things like the shutdown that resulted from it — have mitigated the advantage that they otherwise might have on this issue. The fact that Republicans trail on an issue on which Obama’s approval rating is 34 percent speaks volumes and suggests the GOP message on that issue, at the very least, isn’t resonating.”

Moms Used to Boost Obamacare Enrollment

In an effort to boost Obamacare enrollment of young, healthy adults, the Obama administration is enlisting moms for support.

The Washington Post: “Recognizing the power of mobilizing this critical demographic, President Obama and the first lady will meet with a group of moms in the Oval Office on Wednesday afternoon.”

“The group will discuss the critical role that moms are playing in helping their families and communities access quality, affordable health care,” the White House said. “Women are often the health care decision makers for their families and are a key demographic for the ongoing effort to ensure consumers know about the new health benefits available to them under the ACA.”

Former Microsoft Executive to Run

Retired Microsoft executive Kurt DelBene is taking the reins at, stepping in for former Obama administration official Jeff Zients, the Washington Post reports.

The Wall Street Journal notes that DelBene, “who served as president of the Microsoft Office Division, will be a senior adviser to Health and Human Services Secretary Kathleen Sebelius and will oversee the project and the troubled health-insurance marketplace.”

DelBene is also the husband of Rep. Suzan DelBene (D-WA).

'Medicaid Gap' Will Deepen Inequality

Greg Sargent examines the consequences of the looming ‘Medicaid gap” created from those predominantly Republican-controlled states not opting in to Obamacare’s Medicaid expansion.

By turning down federal assistance that could “otherwise go towards expanding coverage to their own constituents … untold numbers risk falling into a ‘Medicaid gap,’ making too much to qualify for traditional Medicaid, yet too little to qualify for subsidies on the exchanges.”

The result: “Racial and geographic disparities in access to coverage will worsen.”

“Failure to opt in could mean over two million white Americans fall into the gap. This comes as Republicans are resisting an extension of unemployment benefits and are pushing for far deeper cuts to food stamps than Dems are willing to accept (though they are certainly culpable here, too).”

“Beyond this, the big story is that failure to opt in could deepen disparities in health coverage across the board.”

Why Republicans Won't Reform Health Care

Josh Barro writes that Republicans will never reform health care because they lack the courage to withstand criticism from politically contentious policy decisions.

“So it’s no surprise Republicans haven’t enacted any of the big reforms they like to talk about. The only reforms they’ve been able to implement are ones that hand out new benefits without creating any losers.”

“These policies haven’t … exposed Republicans to attack for causing people’s health plans to change.”

“Liberals chose to reform health policy despite the political risks, because their political coalition includes the people who aremost extensively screwed by the health policy status quo. Conservatives have decided that cynicism is a better political strategy … They’re probably right on the politics, but that’s nothing to be proud of.”

Look to Auto Bailout for Obamacare Prognosis

Dana Milbank counsels us to look to the auto bailout in determining perceptions on Obamacare’s success. Milbank contends that despite the success of the auto industry in recovering from its 2009 bailout, criticism remains.

Critics’ “undiminished opposition to [the auto bailout], a position many conservatives share, is worth examining because there is apparently no pattern of facts that would change it. This, I suspect, is what Obamacare is up against.”

So, “when will the criticism of Obamacare finally end? … Judging from current trends, this will happen approximately . . . never.”

Medicare Gap Mostly Hits Minorities

“Next year, the nation will be split: 25 states and the District of Columbia will expand Medicaid coverage, while 25 states won’t. In those states without expanded coverage, nearly five million people will be ineligible for Medicaid as it exists currently but will be too poor to qualify for subsidies on the new Obamacare marketplaces,” CBS News reports.

“That so-called Medicaid coverage gap will mostly impact minorities, according to a new report — particularly uninsured African-Americans living in the South — and will likely widen the already-existing racial, ethnic and geographic disparitiies in health coverage… Already, minorities are more likely to be uninsured (27 percent) than whites (15 percent), with Hispanics at the highest risk of lacking coverage (33 percent). That gap makes the expansion of Medicaid particularly important for people of color.”

A New Sign That Obamacare is Working: Ads

Greg Sargent writes that “insurance companies are set to unleash hundreds of millions of dollars in advertising to entice potential customers on to the exchanges created by Obamacare.”

“All this is a reminder of just how much of a stake the industry has in the law’s success, and how much it is willing to spend to try to make that happen.”

“Polls have shown that only Republicans believe Obamacare can already be pronounced a failure or that it can’t be made to work. Everyone else — including the insurance companies, who are putting huge money on the line — appears to believe otherwise.”

Obamacare Back-End Problems Improving

Enrollment records for nearly 15,000 consumers were not initially transmitted to the insurance plans they selected, report Obama administration officials.

Sarah Kliff: “While these cases pose a challenge for the Obama administration, officials say they believe the situation is improving. Since early December, fewer than 1 percent of enrollments did not make their way to health insurance plans … indicating that a suite of software fixes have helped address the problem.”

“During the first two weeks of October, the new federal analysis estimates, nearly 10 percent of enrollments were missing an 834 transmission. That number rose to 15 percent in mid-October before steadily declining through November.”

“The other two [problems with 834 transmissions] are enrollment transmissions being sent in duplicate and those that are sent with inaccurate, or missing, data.”

Nevertheless, “some [insurers] say they are initially seeing fewer discrepancies than they had initially expected.”