Friday, August 21, 2015

A More Affordable Care Act | The Incidental Economist

A More Affordable Care Act | The Incidental Economist
by Andrew Sprung

Review: ObamaCare is a Great Mess: A View of the Affordable Care Act Without Partisan Blinders & How to Fix It. By Jed Graham. Amazon, June 2015

Those who have closely followed the drama of Affordable Care Act implementation as it’s unfolded in the media may be familiar with the sharp criticisms of Jed Graham, a reporter at Investor’s Business Daily. Given the title of Graham’s e-book assessing the law, ObamaCare is a Great Mess, a sometime reader of Graham’s articles might assume that he’s one of the ACA’s many implacable ideological opponents. That would be to ignore the subtitle, A View of the Affordable Care Act Without Partisan Blinders & How to Fix It, as well as its substantive criticisms and recommendations.

Graham identifies the law’s shortcomings from an essentially progressive perspective, highlighting what he presents as the regressive impact of its mandates and the limited affordability of its offerings for many buyers. “The heart of the ACA is basically sound,” he writes. “The goal of reform should be to unclog the arteries and let the heart do its job.”

The artery blockages Graham alleges include the following:
The ACA subsidy structure renders coverage genuinely affordable only for insurance seekers with incomes up to about 150% of the Federal Poverty Level, or 200% FPL at best. Those at higher income levels are voting with their feet, forgoing marketplace offerings.
For too many buyers, the only premiums that look affordable are those charged for the lowest-tier bronze plans — yet high deductibles and cost-sharing render these plans close to useless for most low-income buyers.
The ACA’s limited age-rating, allowing insurers to charge the oldest customers three times as much as the youngest rather than the pre-ACA industry standard of 4-to-1, renders coverage unaffordable to too many young adults and hence is producing risk pools that are too old and sick.
The high price of unsubsidized insurance renders coverage unaffordable for many prospective buyers — older ones in particular — whose incomes are modestly above the subsidy threshold.
The tax penalty for those who forgo coverage is unduly harsh for those faced with the unaffordable-silver-vs. unusable-bronze choice.

His “sound heart” avowal notwithstanding, Graham views the ACA’s somewhat spotty successes to date through a resolutely glass-half-empty prism. The core problem he identifies — the marginal affordability of ACA private plans offerings for many of the uninsured — is real. But he tends to downplay offsetting facts and factors — for example, that more than three quarters of buyers who are eligible for the Cost Sharing Reduction (CSR) subsidies that are available only with silver plans do in fact choose silver, or that large percentages of the still-uninsured who are eligible for subsidies remain unaware of the help available.

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