By Lambert Strether of Corrente.
The normally reliable Elizabeth Rosenthal, “a New York Times correspondent who is writing a book about the health care system,” has produced a shockingly agnotological and tendentious article on ObamaCare and its “growing pains.” I’m going to go through the article — “Sorry, We Don’t Take Obamacare” — and juxtapose Rosenthal’s reporting with material familiar to Naked Capitalism readers, often from two or even three years ago. We’ll find that Rosenthal’s article is disinformant in three ways: It’s dilatory, incomplete technocratically, and incomplete in terms of public policy. (Long-time Naked Capitalism readers will find the material an easy read, and newer readers may find ways to apply it to campaign 2016 and Medicare for All.)
Here’s Rosenthal’s summary of the state of play; I’ve added numbers for the individual points:
Some early studies of the impact of the Affordable Care Act plans are proving patients’ grumbling justified: Compared with the insurance that companies offer their employees, plans provide less coverage away from patients’ home states,  require higher patient outlays for medicines and include a more limited number of doctors and hospitals, referred to as a  narrow network policy. And while employers tend to offer their workers at least one plan that allows them  coverage to visit doctors not in their network, patients buying insurance through A.C.A. exchanges in some states do not have that option, even if they’re willing to pay higher premiums.
(I like “grumbling”; I mean, it’s not like access to health care can avoid suffering or death.) And to be fair, most NC coverage focuses on the intrinsic absurdity, unfairness, or unaffordabilty of ObamaCare policies as such, rather than comparing them directly to employer-based plans, as Rosenthal does. That said, let’s take those points in order
 Pharmaceuticals. On higher patient outlays, “Obamacare’s Drug Coverage Minefield,” December 5, 2013:
[Quoting the Wall Street Journal:] In a study of 22 carriers in six states, Avalere Health found that 90% of bronze plans (with generally the lowest premiums) require patients to pay a percentage of costs, 40% on average, for drugs in tiers 3 and 4, compared with 29% of employer-sponsored plans that most Americans currently use. Most silver plans also require patients to pay 40% for the highest-tier drugs, although some have flat fees of $70 to $270, the study found….
Now let’s not kid ourselves. Current private insurance plans often put a lot of the burden of pricey drugs on the patient. But the bronze plan v. employer-sponsored plan comparison above shows that patients will often face bigger financial charges than their peers who are on the corporate meal ticket.
 Narrow Networks. On the limited number of doctors and hospitals, “ObamaCare Roundup: Random Rates and Narrow Networks,” June 14, 2014:
What’s in and out of network really matters, because — whoopsie! — you can be on the hook for everything if you go out of network. But as Kevin Drum explains, nobody’s looking out for you but you, and in the nature of the case, you’re stressed, sick or injured, possibly even disoriented, and prone to error. Error that’s profitable for the insurance companies, naturally.
[Narrow networks have] been a growing problem with private insurance plans for years…. [I]t gets worse with Obamacare in some states because of the narrow networks supported by nearly all ACA insurers. For example, [one reader] confirmed to me that he had a Blue Shield plan, but that’s not the whole story. “The blood lab in question is in network for Blue Shield, but not for Blue Shield CoveredCA [whoopsie!] plans, as per everyone I’ve spoken to about it.” …
[I]’s really hard to be alert enough all the time to avoid this. You have to remember to ask every time. You have to ask every doctor, and you have to ask for every lab test. And most doctors don’t know, and don’t really want to be bothered finding out. So you have to be very, very persistent.
And most of us aren’t very, very persistent. Especially if, say, we’re in an ER worried that chest pains [whoopsie!] might be an indication of an oncoming heart attack.
How big a deal is this? I don’t have any way of knowing.
Not only does Drum have no way of knowing, I don’t think ObamaCare itself has any way of knowing; everything is siloed by insurer. They have no reason to make themselves look bad, and there’s no way to aggregate the data for problems like this for ObamaCare as a whole.
 Balance Billing, or what happens when you “visit doctors not in their network.” “Another Lurking Obamacare Problem: Balance Billing,” November 19, 2013:
One of the proofs that Obamacare is really about helping insurers and Big Pharma rather than ordinary Americans is its failure to do much about the seamy practice known as balance billing.
Say you have a scheduled procedure, like getting a stent. Like most Americans who have health insurance, you are in an HMO or a PPO. Your doctor, who is in your network, schedules you for the operation at a hospital in your network. You assume the only thing you need to worry about is a fairly minor co-pay and recovery.
But weeks later, you find that the anesthesiologist wasn’t in your network, and you are hit with a $12,000 bill for his services. And this sort of scamming (hospitals knowingly putting people on a surgical team that they can bill at huge premiums to negotiated rates) is routine. And of course, if the ambulance takes you to an emergency room that is not in your network, the outcome can be catastrophic.
Finally, Rosenthal mentions the impact of narrow networks on cancer patients in particular.
Some of the problems may have been predictable. When designing the new plans, for-profit insurers naturally tended to exclude high-cost, high-end hospitals with whom they had little clout to negotiate discounts. That means, for example, that as of late last year none of the plans available in New York had Memorial Sloan Kettering Cancer Center in their network — an absence that would be unacceptable to many New York-based employers buying policies for their employees.
“Obamacare Narrow Networks: How They Affect Doctor Specialties,” October 12, 2013:
As we venture into the world of narrow health care provider networks, I thought I would take some time to study what they really mean, in terms of how the new networks might affect patients’ access to specialty care services. To do this, I compared the current landscape of provider networks with those that will be available on the Exchanges. I used Washington State as a case study.
As you can see from my results, the most under-represented specialties (on the left) are the ones that typically provide services to truly sick patients, such as oncology, cardiology, internal medicine, neurology. And no doctor specialty has more than about 75% representation on the Exchange provider networks. Hospitals are also included on the right of the graph. Their numbers are diminished in the Premera Exchange plan network via excluding specialty hospitals that are crucial to good care in this region, such as Children’s Hospital and the Seattle Cancer Care Alliance.
I’m just a little amazed that Rosenthal, and her readers, have to be treated to a potted summary of these issues in 2016 when all these problems were investigated in 2013 by people who were actively evaluating the polices available on the the exchanges, some directly seeking care. What kind of bubble do these people live in?
Incomplete Coverage of the Story (Technocratic)
Rosenthal mentions, without naming them, “early studies,” but oddly doesn’t cite two studies from the well-known National Bureau of Economic Research (NBER), both of which undermine ObamaCare’s ideological foundations. Remember that ObamaCare is a neoliberal, market-based program that assumes buying health insurance is like buying a wide-screen TV, and that people will comparison shop (which will ultimately bend the cost curve down). Unfortunately, these assumptions are false.
Here’s how Rosenthal presents the ObamaCare shopping experience:
When Sara Hamilton of New York was shopping on the exchange for a plan to cover her and her two young-adult children — who live in distant states — she discovered that none of the plans covered doctor visits in those places. When notified that the plan would double its monthly premium the following year, to nearly $1,000, she went shopping again on the state exchange and chose a Blue Cross silver plan for $500.
Notice the key point: Rosenthal shows shopping, but not comparison shopping. In Rosenthal’s telling, all Hamilton did was cut back on price. Rosenthal does not show that Hamilton received equivalent value, which conforms to consumer behavior in the first study she did not cite. From NBER Working Paper No. 21632, October, 2015 (cited by Naked Capitalism January 12, 2016):
We find no evidence of consumers learning to price shop after two years in high-deductible coverage. Consumers reduce quantities across the spectrum of health care services, including potentially valuable care (e.g. preventive services) and potentially wasteful care (e.g. imaging services).
[E]ven under the most optimistic assumptions, close to half of the formerly uninsured (especially those with higher incomes) experience both higher financial burden and lower estimated welfare; indicating a positive “price of responsibility” for complying with the individual mandate. The percentage of the sample with estimated welfare increases is close to matching observed take-up rates by the previously uninsured in the exchanges.
In other words, 50% of the unenrolled believe ObamaCare would decrease their welfare, making it highly unlikely that ObamaCare will ever provide universal coverage, and those enrolled don’t comparison shop to reduce costs, but simply pick a cheaper policy, often at the risk of their health. From the technocratic perspective, ObamaCare is failing because its neoliberal conceptual foundations are false, not because of any lack of transparency, as Rosenthal later speculates. You’d think these studies would be part of the narrative?
Incomplete Coverage of the Story (Public Policy)
First, Rosenthal describes variations between ObamaCare coverage as follows, seemingly without noticing the intrinsic injustice of disparate access to health care:
Many of the problems may well be the growing pains of a young, evolving system, which established only broad standards for A.C.A. plans and allowed insurers — a large majority of them for-profit — in designing their exact offerings. The specific requirements and policing mechanisms , and are still works in progress.
The legislation created four tiers of insurance — bronze, silver, gold and platinum. … But within each tier there are dozens of plan designs that give buyers the choice of different premiums, deductibles and networks of doctors, among other things. And the .
(I like “work in progress.” ObamaCare was passed in 2010! How long do the “growing pains” continue?) But as we demonstrated in exhaustive detail in a six-part series of posts in 2013:
In a six-part series on “ObamaCare’s relentless creation of second-class citizens,” I showed how people seeking health care through ObamaCare’s exchanges get (1, 2, 3, 4, 5, and 6. In addition, people “on the bubble” for income eligibility are incentivized to corrupt the system by gaming it.)
These variations are in great contrast, both morally and economically, to single payer’s “everybody in, nobody out” model.
So, from the public policy perspective, not only does Rosenthal accept the inequity of differential treatment for people who are situated similarly, she gives specifics on only one (“by each state”) of the multiple ways in which this inequity can occur.
Second, Rosenthal ignores or suppresses solutions that are not market-based (that is, are not neo-liberal). She begins by pushing the shibboleth of transparency, which is a good thing only if a market is not broken:
In order to make smart choices, patients need far clearer and more accurate information about the plans’ restrictions as well as which doctors and hospitals are in the network. Yet such information is rarely available, and early research suggests that only a fraction of the doctors listed in some directories are available to see new patients.
But as we have seen from the NBER studies, the “smart choices” model isn’t working in the real world; consumers don’t comparison shop. (Rosenthal might have argued that they would, were the market more transparent, but that assumes what needs to be proved, and also assumes that insurance companies won’t game the system. Just because the physician directory is correct doesn’t make a network any less narrow, or prevent a hospital from balance billing).
Rosenthal goes on to mention the “public option”
This disappointment is fueling renewed interest in a “public option” that would supplement current offerings. That idea found support from both Senator Bernie Sanders and Hillary Clinton as the Affordable Care Act was making its way through Congress. It was taken up again last week by Mrs. Clinton, when she suggested allowing people 55 and over to buy into Medicare, the government-run insurance for people 65 and over, which is accepted by virtually all hospitals.
Of course, this isn’t a serious proposal by Clinton, because she doesn’t address the issue of how subsidies would work, or even if there would be any. But did you notice Rosenthal suppressing anything? Of course you did: Single payer Medicare for All. (I mean, it’s not like there’s a whole single payer system called Medicare 60 miles north of Burlington. That’s science fiction stuff! And it’s not like there’s a presidential candidate who’s made Medicare for All a centerpiece of their campaign.) And ironically, a new poll on single payer appeared two days after Rosenthal’s article:
Most Americans want to replace Obamacare with a single-payer system — including a lot of Republicans
— even though the wording of the question specifies that the program would be “federally funded.”
Maybe Rosenthal will do a follow-up?
I can only speculate why this article is so dilatory. Perhaps the introduction to the story provides a clue:
“Anyone who is on these plans knows it’s a two-tiered system,” said Ms. Moses, describing the emotional sting of those words to a successful entrepreneur.
Many say they feel as if they have become second-class patients.
I’m guessing that when entrepreneurs get affected, as opposed to poor shlubs like the rest of us, the Times sees a problem, not merely a situation, rather like one of those genre pieces they run about how hard it is for a struggling family to live in Manhattan on $250K a year.
And if you really want to experience “a two-tiered system,” wait until you’re over 55 and, based on its eligibility requirements, ObamaCare forces you into Medicaid and then claws back any health care expenses you incur from your estate, like the house you’d hoped to pass on to your kids, should you have that privilege. Yes, I want Ms. Moses to be covered by Medicare for All, like everyone should be, but I really don’t think she, or Rosenthal, have any idea what being a “second-class citizen” is really like.
Oh, and read Naked Capitalism so you don’t have to wait for the mainstream to take its own sweet time getting to stories that affect you.
 One of the many reasons the “public option” is a terrible idea is that it puts a public service into the marketplace, subordinating it (which is the neoliberal program in a nutshell). One excellent way to gut Social Security would be to make it the “public option” in a “Retirement Exchange” organized like the ObamaCare exchanges.