On Jonathan Gruber's comments 'bashing' Obamacare

Further to Jonathan Gruber's comments from 2013 on YouTube, 

which have talk radio, Fox and Republicans publicly all aflutter. So check this out:

http://www.washingtonpost.com/blogs/post-politics/wp/2014/11/11/obamacare-consultant-under-fire-for-stupidity-of-the-american-voter-comment/

"Healthy people pay, sick people get money," is the way all health insurance works, I'm afraid. It's the way insurance works, period: "Unsunken ships pay; sunken ships get money;" "Undamaged homes pay; damaged homes get money;" "Safe drivers pay; unsafe drivers get money," and so on.

Nevertheless the insurance companies through rescission have tried, illegally, to mitigate the economics of health insurance, retroactively; but PHSA, HIPPA and Obamacare have restricted that underhanded business practice.

No, Obamacare isn't "something for nothing." It's not "free healthcare." More people have to pay in by buying private insurance, or having their employer pay part of their insurance cost, but the economics are sound, there is no other way. The other side of the ledger, (which any accountant should acknowledge), is that having more people insured will lower health spending overall. That's what the CBO has said consistently. 

In the U.S. we're spending nearly 20 percent of GDP on health care, and that's not sustainable. It's also not competitive. Check this out from the World Bank,health expenditure, total (% of GDP):

Australia -- 9.1 percent

Canada -- 10.9 percent

France -- 11.1 percent

Germany -- 11.3 percent

Great Britain -- 9.4 percent

Japan -- 10.1 percent

... and so on.

Next, take a deep breath and check this out: "Revisions to CBO's Projections of Federal Health Care Spending" from July 2014. Upshot: The U.S. economy, at least the federal government'share of it, is projected to spend less  on health care in the long term, which is exactly what we liberal-progressives wanted, to bend the cost curve:

CBO now projects that, if current laws remained generally unchanged, net federal spending for the government’s major health care programs in 2039 would equal 8.0 percent of gross domestic product (GDP)—1.6 percentage points, or about 15 percent, less than the 9.6 percent the agency projected in 2010 (see the figure below). That revision stems in large part from the observed slowdown in health care spending in recent years, but it also includes the effects of other factors; some of those factors reduced projected spending, and others increased it.

The programs included in the calculations are Medicare, Medicaid, the Children’s Health Insurance Program, and subsidies for insurance purchased through exchanges. 

But how can that be, my conservative interlocutor will ask? How can the government be spending more on [Obamacare] subsidies yet projected to spend less, overall?  

The answer, (not to get too wonky), if you read between the lines of the CBO's revised estimate, is that growth in healthcare spending, including on Medicare, has been slowing down faster than anybody projected. 

Indeed, noted conservative Forbes, "The current numbers represent the slowest rate of growth since the government began tracking the data in 1960."

And why is that? Apparently nobody knows yet. But for four years running, the rate of spending on health care in America has slowed... just coincidentally under President Obama, under an Obamacare regime. 

Harvard economist David Cutler argued in the Washington Post a few days ago that, in fact, we do indeed have Obamacare to thank for it.

Probably it's still premature to say for sure, but the signs are good. Yet one more reason not to "repeal and replace" Obamacare when it's doing what it was designed to do -- covering about 7 million more Americans in its first full year; and lowering -- or at least not increasing -- healthcare costs for four years running.

UPDATE (11.15.2014): Here's kind of a fair and balanced analysis of what Jonathan Gruber said (on multiple occasions, unfortunately), from none other than CNN: "Obamacare: Voters, are you stupid?"

It's OK some health plans got cancelled

It's called health care reform for a reason, folks:  

Senator Mary Landrieu's "Keeping the Affordable Care Act Promise Act" would require insurance companies to keep offering people the plans they have right now as long as they keep paying their premiums. It's the kind of poll-tested idea that's good politics, and horrible, horrible policy. That's because it's a good thing if some people lose their plans. That's how reform should work, the White House's false promises and hopelessly bungled roll-out, notwithstanding.

The individual insurance market doesn't work. You can't get insurance if you are sick, and don't get much insurance if you become sick. In other words, insurers won't sell policies to people with preexisting conditions, and sell insufficient policies to healthy people. As Jonathan Cohn explains, these insufficient policies often don't cover things like prescription drugs and won't cover high out-of-pocket expenses. And if your plan wasn't insufficient, insurance companies would look for excuses to cancel it after-the-fact if you did become seriously ill—what's known as "rescission."

Obamacare tries to fix these problems with the individual market—and the inescapable logic of that is some people will end up paying more than before. Here's why in three steps. First, Obamacare makes insurers offer everyone the same policies at the same prices regardless of preexisting conditions (though not age). But bare bones coverage with high out-of-pockets, and even lifetime limits, isn't much use if you're sick. So, second, it sets minimum benefit levels. But what about healthy people who already have individual policies that don't meet these levels? Well, if they had those plans before Obamacare was passed in March 2010, and those plans haven't changed at all since, they can keep them. Otherwise, they can't. [That's an oversimplification of the ACA's grandfathering rules -- J.] They have to buy conforming plans that are almost certainly more expensive. Because, third, Obamacare needs healthy people paying for more than just catastrophic (and even junk) insurance to help pay for all the sick people now getting coverage. In other words, Obamacare needs health insurance to be...insurance.

Bill Clinton Is Wrong: It's Okay That Some People Can't Keep Their Insurance

By Matthew O'Brien

November 14, 2013 | Atlantic

URL: http://www.theatlantic.com/business/archive/2013/11/bill-clinton-is-wrong-its-okay-that-some-people-cant-keep-their-insurance/281455/