PPACA a victory for conservatives?

In his latest Pulling it Together column, Kaiser Family Foundation (KFF) CEO Drew Altman argues that the Patient Protection and Affordable Care Act (PPACA) was a victory for Republican goals –even if that’s not apparent.

KFF commissioned three actuarial consulting firms to estimate what patient deductible and co-insurance costs would be in health insurance policies due to be made available through the exchanges in 2014. (As an aside, KFF must be doing pretty well financially to hire 3 firms for the same task.) In any event, the firms showed that most of the plans would require out-of-pocket expenses for an individual in the range of several thousand dollars. Those numbers aren’t spelled out in PPACA but can be estimated from the way the law is crafted.

According to Altman:

A different way of looking at the ACA is that it represents a bargain between liberals and conservatives, although not one that was ever explicitly made. The left got 32 million people covered and reforms that eliminate the worst abuses in the health insurance system. And the right got a further push, beyond the momentum already underway in the market, towards just the kind of “skin in the game” insurance they have always believed will help control health care costs. It’s the big victory in health reform conservatives seem not to realize they have won.

April 15, 2011

One thought on “PPACA a victory for conservatives?”

  1. Dave, you’ll be happy to hear that I’m supplying MY observations about Altman’s post gratis (my normal fee would no doubt make those actuarial firms green with envy). Despite the chance that their value is equivalent to my price, here goes:

    a) actuarial analyses are particularly unsuited to imagining what will change about how care happens. It is a mode of financial analysis that implicitly assumes that how care IS delivered is how care WILL be delivered. Those who do it, by and large, are change skeptics.

    That’s fine, except that how health care happens in the US will most emphatically be different, and soon. The healthcare variation of PW Anderson’s famous critique of the constructivist hypothesis (“more is different”) is that “different may not mean (so much) more”.

    b) the story of how high-deductible health plans became a political litmus test/lightning rod deserves telling all on its own. In capable hands, provided a sufficiently flexible regulatory environment, with federal “stop-loss” support, the basic design of these plans could produce salutary results indeed; instead, they’re likely to be treated as just another rope for political tug of war. The economic “skin” in “the game” of behavior change, skillfully groomed, is susceptible to nudge-able touch; ham-fisted HDHP designs thwart empathetic support, but there is no cause to reject them out of hand.

    c)Altman’s observation plays, probably unconsciously, on that most pervasive of the many widespread misunderstandings about health care issues, the one that “everyone knows” so well that everyone ignores it most of the time; namely, that costly health care interventions are normally distributed. They’re not, of course. In fact their power law-like distribution, across both population AND across time, greatly contributes to our national confusion about “what to do about” health care costs. As a result we (yes, subject-matter experts too) profoundly misunderstand the financial risks associated with conditions requiring those interventions, and are profoundly unlikely to model them usefully.

    We haven’t space to dig into that conundrum here; suffice to say that unless policy/communications wizards far more adroit than your humble author solve THAT matter, whatever solution(s) emerge from our political processes will also be broadly misunderstood – and broadly demonized.

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