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1. Yep. The ACA is an improvement. Over what we had before. If you’d like to set the bar lower, we’re gonna need a backhoe.

2. At least before, which sucked hard, if I had to wait for a catastrophe to get treatment, I could burden the system by going to the ER, get my bill, and spend the rest of my days fretting about the massive debt, all without having to fork over $130/month for the privilege. Now I could get that same care, and pay $130/month more than I used to for it.

   If any other good or service suddenly tacked on $130/month for the same level of effective usefulness, it would probably be criminal. Since I can’t calculate the percentage increase based on a starting point of $0, let’s call it $1. That’s only a 13,000% increase for the same level of effective service. I’m thrilled, thrilled, I tells ya.

3. WHILE I AM FOR HEALTH CARE. the real problem is no one not even the US government can live on credit for ever. the end result is not going to be pretty and we can blame all the politicians for not being responsible.

4. I’m trying to bite back my anger, here, Frank. I know you’re sincere. I know you’re hurting. I get that. I wish you earned more money. And let me commend you, right here, for fessing up to smoking. I’ve been a smoker. I quit cold turkey after six years and never looked back. I know that quitting is harder for some people, but it can be done. I suggest that, for a number of reasons you already know, you just make up your mind and do it. You will never be sorry about that.

   So, why do I have to bite back my anger? Well, first of all, my insurance premiums for myself and two dependents come to over $20,000 per year. And, no, those premiums don’t cover everything. In fact, that includes no prescription drug coverage, whatsoever. My daughter has been very ill and continues to recover, so that my best guess at this year’s medical bills is that they will come in at around $35,000 or so (including premiums and uninsured costs).

   Why are costs so high and my premiums so high? Well, there are a number of reasons, with the most prominent being technology with no cost/benefit analysis, pharma costs exacerbated by unreasonable patent protections, costs for unnecessary procedures, costs for unnecessary consultations, the AMA’s unjust constriction of medical degrees, my and my wife’s ages, and many, many others. But one of the costs that should be controllable is the cost of insurance premiums created by the uninsured who can’t, or won’t, pay. The fact is, a not-insignificant proportion (8% to 20%, depending on the methodology) of my premium costs is directly related to costs health care providers incur that go unpaid by the uninsured.

   Now, you have insurance through your employer worth around $5,000 to $6,000 (or maybe more, but it’s impossible to estimate without knowing the plan provisions), so your total compensation is actually $27k + at least $5k (and actually, the $5,000 is worth more because it is tax-free compensation). I am self-employed. I pay my own way. Tough to have much sympathy for you there, bro.

   Here’s another fact. Unless you die a quick and violent death, or of a quick onset of some very deadly conditions (heart disease or massive stroke, for instance), you will, without question, spend a great deal of time in the hospital running up unbelievable medical bills. The fact that you smoke makes that possibility almost odds-on for any number of conditions. For lung cancer, if you linger, a total bill of $500,000 wouldn’t be out of the question, and it could be a lot more than that. In fact, the newer chemotherapy drugs threaten to double this amount for many people who are good candidates for those drugs.

   If you were uninsured, would you pay off those costs for the rest of your life? Of course not. You’d do what everyone else does; either die with little or no estate or declare bankruptcy and be done with it. Those costs would then be spread to employers, employees, and the self-employed who pay medical insurance premiums.

   Let’s be blunt, shall we? People without medical insurance are just like people without auto insurance: They are freeloaders. They pass their costs on to everyone else who isn’t a freeloader. That would be people like me.

   As for Obamacare, I wonder how you think the world works, Frank. I really do. Do you think that POTUS, whoever he or she may be, just says “make it so” and it is so? Because I think that’s how the average American thinks. But I do really think you know that laws like the ACA are made by Congress, and that Congress doesn’t always do what the president wants it to do.

   The ACA is a fucking, political miracle. In my lifetime, I cannot think of another bill that made it into law that had such virulent opposition on such a broad scale — not even the civil rights acts. Political careers were ended because people voted for that law, and it wasn’t because it wasn’t enough, but because so many voters thought it was too much. You and I know it wasn’t nearly enough, but the fact is, it’s SOMETHING. And prior to this, there was NOTHING. I believe history will treat the ACA as a stunning achievement for a president equipped with a slim majority in both houses (and no, actual supermajority in the Senate at any time, which is the only way to get things passed, these days). I had long given up on getting anything for the American people when the ACA was passed, seemingly out of nowhere. I have no idea how he got that done. That particular effort was something you usually read only in history books when reading about FDR.

   So, Frank, you HAVE medical insurance through your employer, and you’re complaining that you can’t just go out on your own because you would have to protect the rest of us from your uninsured medical costs and ultimate bankruptcy, right? But why in the hell would you go out on your own to earn only $27,000 per year? Heck, the self-employment tax would cost you around an extra $2,000 per year all by itself. The whole point in taking risks to go out on your own are to give yourself the chance of greater reward. If you go out on your own, aim for $50,000, $100,000, $200,000 or more.

   Do I wish we had, basically, Medicare for everyone? Yup. But that would entail taxes, and the ACA’s premiums are just taxes working under a pseudonym, so there’s no free lunch. Medicare for everyone would go a long way toward keeping medical costs in check, though, and I’m very much for it. But that is a political impossibility. It’s not going to happen any time soon. It was never going to happen, and Obama was too smart even to run on that platform, because he would never have become president if he had.

   Frank, I’m not accusing you of what I’m about to say, OK? This is just a general rant.

   I am sick to death of liberals, progressives, or whatever throwing temper tantrums and holding their breaths until they turn blue because they didn’t get everything they wanted in the six years Obama has been president. It’s childish. I’m beginning to believe that they’re worse than the worst paleo-conservatives. How did they become (nominal) adults without understanding that politics is the art of the possible, and that attempts to achieve the impossible result not only in immediate failure, but also in long-term failure (see “McGovern”).

   If we are very lucky, the ACA is an increment that will lead to truly effective, universal health care paid for with a progressive tax within the next 10 to 15 years. Without it, I have great trouble seeing any path to universal health care inside a 30- to 50-year horizon.

   Sorry to be so long-winded. Clearly, it’s a passion.

   • This is, as usual, well argued, nicely written and mostly correct.

     Although I suspect you underestimate the effect of excess capacity in medical system (too many scrips, too much equipment, etc,) over-protection of pharma R&D by the government, the restriction of supply by the AMA (there’s a reason there are so many foreign doctors here–doctors in the US make more than anywhere in the world,) and I think you target the wrong freeloaders.

     The real freeloaders are those of us with employee-paid health insurance. Because it’s not taxed, our employers are basically able to pay us with magical pre-tax dollars. If it was taxed, as it should be, there would be a lot more money put into the system. According to Forbes, that’s a $180 billion tax break to people with employer-paid insurance, or $40 bil in lost tax revenue.

     (Although now that it has to be reported on tax forms, many feel it’s only a matter of time before it will be.)

     At any rate, to both your point and Frank’s point: Insurance pricing hopefully will settle down once there’s more data in the system. Right now, providers aren’t quite sure how to price so they’re pricing high. (I hope. Florida set up an insurance exchange to protect rich white people who own homes on the beach and surprise, turned out it was drastically under-priced.) It’s a little early to call the question on ACA either way.

     • Otherwise,

       Thanks for you comments. I’m not sure you know my background. I was a senior consultant, national resource consultant, and principal at some of the US’s largest consulting firms (you would know the names) helping employers deal with the health care crisis. In my final job, I was practice leader for an 11-state region, and by the time I left the big firms, I had consulted to more than 80 of the Fortune 500. I don’t say this to be self aggrandizing. Others have more impressive credentials. I just want to give you a sense that I have some minor expertise in the issues at hand.

       I know that I rambled in my diatribe, above, but I think you’ll find that I touched upon the AMA’s restriction of medical degrees, the lack of cost/benefit analysis on technology (which includes excess capacity of some very expensive stuff, as well as the fact that some technology serves very few and costs very, very much), brushed on pharma by mentioning unreasonable patent protection, etc. I don’t underestimate these things in the least. I must have looked at scores of reports by actuaries specializing in health care costs that pointed out just how important those things were in driving cost, not to mention driving lower and lower quality in some cases.

       My ire was raised by something I run across all the time: The fact that so many people avoiding buying health care coverage, or complaining about having to buy it, simply don’t understand that they are putting the rest of us at financial risk by doing so, and that the cost of uninsureds to everyone else is quite high. In fact, no one knows just how high it is because the uninsured tend to wait until conditions are acute, and more expensive to treat, before seeing a physician in the first place. That’s compounded by the fact that hospitals want to discharge the uninsured as quickly as possible, often before they are properly treated, hoping they will go to some other hospital for free treatment, later. Add that to the actual, stated cost of providing free treatment, and it becomes significant.

       (Oh, and let’s not forget the bankruptcies that drive up interest rates, and especially credit card interest rates.)

       Look, I don’t like the ACA. I think it’s a band aid on a severed aorta, OK? But I also understand the political realities, and I get damned tired of people criticizing others, no matter who they may be, for failing to achieve solutions that are politically impossible to achieve. That we have the ACA at all is amazing and a minor miracle, because the smart money was on getting nothing at all. If you’ve got a severed aorta, and band aid might just slow the bleeding a bit. Surely, doing nothing is not likely to accomplish much.

       I’m not sure I follow you entirely on pre-tax money being used to buy health care. I understand that these tax breaks cost money, but I’m not sure that makes those who receive those tax breaks freeloaders. If one could assume that all that money would be devoted to supporting Medicare or Medicaid costs, then perhaps. But it would probably be spent on a new weapons system ;-). Anyway, without those tax breaks, we’d simply have more people going without health care insurance because the costs to them would increase. Employers would be unlikely to pick up the cost of the lost tax break.

       I don’t know if health care costs will settle down. Spreading the risk to more, and healthier, people should help a bit, but the underlying drivers are still there, and until we address those, I just don’t see it. I must have seen health care costs appear to stabilize for a year or so around five or times in my life. The first time was with PPOs, before providers realized that the way to make up for the lost revenue of volume discounting was to see more and more people, more and more times, for less time each visit. Same with non staff-model HMOs for a bit. Same with prices in the past two years or so. We’ll see if it holds. I’m skeptical.

       I’m sympathetic toward anyone who is struggling to make ends meet, but I have no more sympathy for those without health insurance (at a reasonable cost with a government subsidy) than I am for those without liability coverage in case of automobile accidents.

       • I didn’t know your background, but clearly you’re more qualified than I on this one.

         1. Yes, 80% of my post was repeating what you said. I ranted a little. But you’re exactly right–we’re saying the same things. I was agreeing violently.

         2. If employee benefits were taxed, that would be $40 billion into the coffers to support healthcare overall. It would also force everyone to make the decision Frank was talking about–silver vs. bronze and all that–and make it using real dollars. Right now the average employer-insurance household pays about 40% of their healthcare coverage. If they paid the full amount, they’d choose less, and it would force some discipline into the bloated system. Freeloaders may not be the right term–I’d have to spend more time than I’m willing to do to work it out in my own mind, but I think those with employer paid insurance have a huge and unfair advantage over those purchasing insurance on the open market, which makes them overly willing to criticize ACA and unwilling to demand the healthcare system shape up.

         3. By the way, in Aus they have both public and private and it works great.

5. Art Frewin: You are mixing up concepts. One is universal healthcare, which has proven very convincingly to get better results for far less money than the US system. The other is the idea that one can reduce taxes, reducing revenues, and then maintain or increase benefits. These two things are not the same. They are completely different issues. There would be no problem providing Medicare to everyone if Medicare taxes were adjusted to pay for it. Those taxes could be, theoretically, less than what employers, employees, and the self-employed are paying for private insurance.

6. Sorry, not sure my comment went in the right place. Was responding to JSO.

7. jstephenobrien: I liked your comment above, particularly about ACA being a means to get to universal health care later on, and how current premiums are just a tax in disguise. I am in Canada, where we have had the benefit universal health care, for a very long time. Is it perfect? No. But I would never give it up.

   This blog post, to me, could be more focused on the bigger picture of income inequality, rather than the ACA being yet another expense. In Canada, we of course pay higher taxes to cover our universal system as well as our subsidized, public post-secondary education system. This is just part of life, and I believe most Canadians accept it.

   The problem is, in the US, if you are poor, you’ll likely stay that way. Why? There are a number of reasons, but one is that in order to get a quality post-secondary education, you’ll pay tuition through the nose since the public education system is being eroded away, and even with a decent salary following graduation, you will likely not be able to pay your loans back for a very long time. Those with less education will have to make due with relatively less and less, since the income gap is growing. The only option you might have is to accept a lower salary, or, join the military.

   Your president is trying to make community college free – this is another baby step he is attempting to make, like passing the ACA, to get the US to start looking a little more like your neighbor to the north and many other wealthier nations.

8. Excellent anecdote Frank. I suspect some of your wage issues are based on a love of Big Sky country and and unwillingness to trade love for money. I made a similar choice in the late 70’s taking a $4 an hour warehouse job out of college so I could be a ski bum. A mere 35 years of fun hard work later I’m a rich fat fucker who loves going to work. Don’t shake your head, this is America, it could happen to you.

   The ACA, which I’ve supported from day one is a great idea abysmally implemented so far. I say so far because we have 3 more years of roll out and another 5-10 years before we really _know_ what it will do. It’s still vaporware in many ways. Between the feds moving the goalposts and giving special interest carve outs, and my tribe (yes I’m a filthy Republican) trying to nut and short sheet it at every opportunity, it’s really hard to tell what it will end up being

   For it to work the rest of the red states are going to have to buy into the Medicaid expansion and insurance companies are going to have to really abide by profit limitations of the law and not just cook their books wink wink. Admittedly a tall order and as Art noted we really really need to figure out how to finance it without selling more rubber T-bills to the Chinese.

   For the moment the only clear winners are the poorest among us who are now eligible for Medicaid and insurance companies who’s stock values have shot up through the roof. If I was going to accuse one of those groups of freeloading it wouldn’t be the poor people. The rest of us are simply paying more. I’m OK with that just as I’m OK with my business paying 100% of employee health care including dental and vision. I consider it a responsibility to my employees but I know a lot of businesses don’t and that’s why we needed the ACA or something like it.

   Think, speak, vote…

   • Frank! Where you been? Haven’t seen you lately. Coming to Colorado in late August for bike race (watching) and to do some hiking. You up for dinner? I’ll bring Doc Sammy.

     • Right here brother, I just haven’t found much to get my teeth into lately. This topic is dear to my heart though and oh so important for all Americans. The business model isn’t working, and I’m guardedly optimistic that J Stephen is correct. We are a few slippery stone steps away from Medicaid for all. While not necessarily opposed to for profit medical care, there are way too many layers of middle men currently.

       Dinner sounds nice. I don’t do LoDo, but I would be happy to grill you and Sam some tasty well aged Black Angus bone in cowboy cut rib eyes on the back patio here at the house. You can bring the beer. Let’s put a tentative note on our calendars.

9. By the way, just to add some meat to JSO’s argument.

   Let’s assume a smoker pays $150 a month for Obama care for 30 years. (Ignore inflation for a moment–it cancels out anyway.) Let’s assume he or she never ever has anything wrong with them until one day they get lung cancer. The average cost of lung cancer treatment is $125,849.

   (http://www.aflac.com/individuals/realcost/source/#lung_cancer)

   That’s $54,000 in and $125,849 out.

   Now only 10% of smokers get cancer, but over half die of smoking-related diseases. So for a smoker, ACA is a great, great deal. On average $54K in, about $75K out. Better than a CD. (In fact, 80% of national health costs are caused by chronic behavior-related diseases like smoking, so it’s probably also a good deal if you like to eat and drink too much and don’t like exercise.)

   Now, Frank, I agree with you that the cost is too high and a terrible burden on the poor. However, JSO’s right that the reason the cost is so high is a terrible medical system and I add a tax system that prevents reform. It’s not ACA. I dont know if ACA could have gotten more, but it’s better than nothing.

10. Oh look a fire! Allow me to pour a little liquefied desequestered carbon on it. Smoking does take years off lives no doubt and your numbers flow as far as they go Otherwise yet you left out the rest of the story.

    Let’s assign a health cost to every pack of cigarettes of say 50 cents. I see that number batted around a lot in reading so it’s not entirely pulled out of my arse. Immediately we need to offset that by tax revenue collected off each pack which varies by state from 48 cents to 2 dollars. A significant portion of which goes towards healthcare for indigent children.

    Then, we should also add in the Social Security savings and reduced long term care costs provided by smokers thoughtfully snuffing themselves out early. Conservative estimates add another 50 cents a pack savings for society. So you see, it’s quite logical to argue that smoking not only saves society money, it also saves children’s lives. Who knew?

    Now I’m not suggesting anyone should take up smoking. It’s a filthy habit that I’ve given up several times in my 60 years and as Frank notes the shit is more addictive than heroin. However if we’re looking at the balance sheet the citizens most likely to cost society an arm and a leg are not nasty ass smokers. It’s the fruit and yogurt loving “My body is a temple” health nuts who tend to live far beyond their mental capacity who rack up the largest lifetime healthcare costs.

    Bet you didn’t see that one coming 8^)

11. First, I should apologize for whacking the hornet’s nest then disappearing for a couple of days 😉 I must say, it’s very gratifying to lay something like this out there and to get so much commentary and serious discussion from folks I respect, so thanks to all of you! Much has been said above by those who know more of the industry and the way it functions than I probably ever will, and I can hardly disagree with much of what’s been said.

    That said, and with some awareness I risk trolling one of you in particular in spite of my generally high level of regard, I’d like to take a moment to thank JSO. I triggered anger. This is a good thing. In anger, like wine, there’s often truth.

    “Let’s be blunt, shall we? People without medical insurance are just like people without auto insurance: They are freeloaders. They pass their costs on to everyone else who isn’t a freeloader. That would be people like me.”

    And,

    “I am sick to death of liberals, progressives, or whatever throwing temper tantrums and holding their breaths until they turn blue because they didn’t get everything they wanted in the six years Obama has been president. It’s childish. I’m beginning to believe that they’re worse than the worst paleo-conservatives. How did they become (nominal) adults without understanding that politics is the art of the possible, and that attempts to achieve the impossible result not only in immediate failure, but also in long-term failure (see “McGovern”).”

    And,

    “…the ACA is an increment…”

    Thank you for making my case for me. Here on the left we’re so used to othering our fellow Americans on the right that it might be easy to miss how often an espousal of the kind of realpolitik you endorse causes some in the center to other those of us farther to the left, lip service to our demands, requests, and/or flights of fancy be damned.

    To the extent that I’m glad those in the center make the occasional gains for the middle class, I’m happy for their success. But do you actually hear yourself? If those of us “down here” would just wait for the art of the possible long enough, increment by increment, the rising tide you’re diligently fighting for will eventually lift our boats, too. The benefits of your realpolitik will, hrm, how could I put this creatively? I know, those benefits would trickle down!

    Maybe I’m partly at fault for obscuring the issue by using myself as an example. After all, I do have employer-paid coverage. Given the nature of the coverage, it’s on par with the $250-ish/month options I found on the Montana exchange, so we could safely call it about $3000 of tax-free income. Maybe my argument would have been more persuasive if I’d referred instead to a fictional (and yet all too real) couple who jointly make $27,000 with two kids. Said couple, being woefully underemployed, doesn’t have employer-paid coverage. Now they’re required to pony up some amount of money (or maybe none) per month. I don’t know. Their particulars clearly differ from mine, and being that this is my lunch break I don’t have time to look it up. The insurmountable hurdle remains, however, and it’s the one key point I don’t believe you addressed head on.

    With times hard and money tight, just where does that $6250 deductible come from, so that all that glorious coverage actually does some good? Even using myself as the example/whipping boy, I asked that question. What good is the coverage if I can’t make it past the starting line? That’s all my own $130/month admission fee would get me. A clear view of square one. So what about Jane and John Doe? Does that $6250 come out of little Jimmy’s and Betty Ann’s shoe fund for next year? Maybe if they eat less Hamburger Helper. Oh, I know, they can. Wait. No, I don’t know. Maybe if enough friends put enough collection jars in enough convenience stores around town, maybe if the church has a raffle….lots of maybes there. And what about next year, if it’s a crisis that spans from one coverage year to the next. Better keep those convenience store collection jars dusted off. The Does will be needing them again. But hey, at least they were forced to part with any amount of their money, because it’s realpolitik. It’s the only way to make sure that their neoliberal betters will remain in a position to keep promising more trickle down manna.

    Now, maybe I missed something. Perhaps there was a mass movement by the poor and slightly better than poor that resulted in them getting a seat at the table when this whole healthcare nightmare was created, modified, and modified again. Maybe it’s all those poor, working class CEO’s that made the playing field what it is, or all those plebes in Congress, or the peasants in the think tanks, or the serfs in hospital administration, but I doubt it. Somehow those of us who are beat down by the economic system we have precious little say in must bear the brunt. It sure can’t be the 1%. Or the 3%. Or the 10%. Or the 25%. Or the 33%. Nope, nope. Just keep moving the class bar down. Lower. Lower. 47% sounds about right.

    I hope you’ll excuse me if I decide I’d rather go with the sentiment that I believe was first spoken by Dr. King, though I’ll be damned if I can find the attribution now, “the time for incrementalism is over.”

    If politics is the art of the possible, the kind of realpolitik I’d want to see is what can and will happen when the rest of us get a political voice that isn’t shouted down by our putative “allies.”

    • Frank,

      You clearly missed some things I said, or chose to ignore them. Here’s one thing I said, for instance:

      “Do I wish we had, basically, Medicare for everyone? Yup. (… ) Medicare for everyone would go a long way toward keeping medical costs in check, though, and I’m very much for it.”

      Or this:

      “Look, I don’t like the ACA. I think it’s a band aid on a severed aorta, OK? ”

      Or this:

      “I’m sympathetic toward anyone who is struggling to make ends meet, but I have no more sympathy for those without health insurance (at a*** reasonable cost*** with a government subsidy) than I am for those without liability coverage in case of automobile accidents.”

      As for “realpolitik,” I don’t know how you’re using the term. Most people use it incorrectly these days to substitute for “amoral.” Wikipedia quotes John Bew about realpolitik this way: “Historian John Bew suggests that much of what stands for modern realpolitik today deviates from the original meaning of the term. Realpolitik emerged in mid-19th century Europe from the collision of the enlightenment with state formation and power politics. The concept, Bew argues, was an early attempt at answering the conundrum of how to achieve liberal enlightened goals in a world that does not follow liberal enlightened rules.”

      People have been trying to get things done in the teeth of fierce conservative opposition for a long, long time, Frank, and I’ll bet every single one of them had allies like you sniping at them the whole time, too.

      There was no more chance of getting single-payer, universal health care for everyone — let ALONE single-payer health care based on a substantially progressive tax — in the past six years than there was of getting a civil rights law passed in 1830. (OK, a little hyperbole there, because a .005% is a better chance than 0%, but it’s pretty damn close.) You can want what you want, and wish for what you wish for, and think magically just as hard as you like, but the funny thing about magical thinking is that it is never, never subject to the rules of cause and effect.

      And are you serious, comparing yourself to Martin Luther King, Jr.? Seriously? Here’s the thing about Dr. King. He got out there and worked his butt off and organized for his cause. He demonstrated and convinced others to demonstrate with him, and to win the moral high ground my turning the other cheek. And it worked, in the sense that he accelerated a bit along he path to racial equality. But he STILL didn’t get everything he wanted. Not even close. And, you betcha, there were those who criticized him for not getting them everything they wanted. Their names are pretty famous. Their actual accomplishments are extremely modest.

      As part of the unicorns-and-rainbows left, Frank, the pattern is pretty obvious and it has nothing to do with Dr. King. Here’s how it goes.

      1.Complain about your life and how others should do something about things for you.
      2. When others try to help, explain to them that it’s up to them, that you don’t vote because it’s just too inconvenient and it doesn’t matter, anyway.
      3. When it becomes impossible to actually pass the legislation you want passed because not enough rainbows-and-unicorns voters voted to put like-minded candidates into office, complain bitterly about the “centrists.”
      4. Vow that you will never vote for those trying to help you, again, because you only got part of what you wanted.
      5. Attack those who try to help you because they can’t clean the Augean stables in a day with a teaspoon.

      The right has the Tea Party. We have the Rainbows and Unicorns Party.

12. To get back to math and the topic of freeloaders, if you take the $40 bil tax dodge that is employer-funded health care and spread it over the approximately 30 million households that fall below Frank’s $27000 line, that works out to about $100 bucks a month per household, which would go a long way toward relieving the burden of ACA. Since many of those below that line are covered by other government programs, it would probably more than erase it.

    Tax dodges don’t seem like a big deal, but they are.

    • Now do me the math on single payor.