END OF 2018 OPEN ENROLLMENT PERIOD (Connecticut & Maryland)

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Bill Clinton said pretty much what I've been saying...if you listen to what he actually said.

So, the last day or so my email inbox & Twitter feed have been filling up with references to Bill Clinton's "Crazy System!" comments regarding the Affordable Care Act. I live in Michigan, but unfortunately couldn't make his Flint speech on Monday due to it being Rosh Hashanah.

Anyway, here's the part which made all the headlines:

Bill Clinton criticized President Barack Obama’s signature policy reform while on the stump for his wife, Democratic presidential nominee Hillary Clinton, calling Obamacare “the craziest thing in the world.”

Here's the problem with this: Clinton wasn't referring to the Affordable Care Act as a whole; he was specifically referring to people on the individual market who aren't receiving APTC assistance.

As I noted a couple of weeks ago:

That 25% weighted national average only applies to the roughly 18 million people enrolled in ACA-compliant individual policies...and even then, roughly half of those folks are mostly protected from the hikes thanks to the federal tax credits. So we're really talking about roughly 9 million people who have to pay the full 25% average increases.

Don't get me wrong...that does suck for those 9 million people; I'm not trying to minimize their concerns. Hell, depending on my income from year to year, I'm occasionally among them (my wife and I are both self-employed and have a highly variable income). Having said that, 9 million people = around 2.8% of the total population.

Let's take another look at my Big Pie Chart breaking out the entire U.S. population by healthcare coverage type. Note that the numbers and percentages have shifted around slightly since I compiled this back in April, but it should still be pretty close to accurate:

You'll have to click on the image to see the high-resolution version, but the point is that out of this entire pie chart, the people Bill Clinton is referring to can be found in the YELLOW slices (and arguably only 2 of those...the "Grandfathered/Transitional" slice is a bit fuzzy, since no one seems to be sure what portion of the 7-9 million person off-exchange market falls into those categories).

Clinton's full comments even make this clear:

The current system works fine if you’re eligible for Medicaid, if you’re a lower-income working person, if you’re already on Medicare, or if you get enough subsidies on a modest income that you can afford your health care.

But the people that are getting killed in this deal are small businesspeople and individuals who make just a little too much to get any of these subsidies.

So you’ve got this crazy system where all of a sudden, 25 million more people have health care and then the people that are out there busting it ― sometimes 60 hours a week ― wind up with their premiums doubled and their coverage cut in half. It’s the craziest thing in the world.

Let's go through the pie chart slice by slice:

  • He's not talking about the Large Group Market or most of the Small Group Market (slices #1, 3, 4 and most of #2).
  • He specifically says that the system is fine "If you're eligible for Medicaid": This includes slices #8, 9, 10 and 12 (traditional Medicaid/CHIP enrollees)
  • He specifically says that the system is fine "if you're a lower-income working person". This includes slices #11 (ACA's Medicaid expansion) and #14 (ACA's BHP program)
  • He specifically says that the system is fine "if you're already on Medicare". This includes slices #5, 6 and 7.
  • He specifically says that the system is fine "if you get enough subsidies on a modest income". This, of course, refers to slice #13 (ACA exchange subsidized enrollees)
  • He makes no reference whatsoever to slices #18 (Indian Health Service; Student Plans; New York's Child Health Plus program; other oddball healthcare programs)

Obviously the 29 million or so who (slices #19-24) are still uninsured whatsoever are part of the equation, but that's a separate discussion.

That leaves slices #15, 16 and (possibly) 17: The roughly 9 million people who are a) enrolled in the individual market but b) earn "a little too much to get any of these subsidies".

In fact, just yesterday the HHS Dept. confirmed something else I've been saying for over a month now: Up to 2.5 million of those 9 million probably would qualify for APTC assistance if they enrolled via on-exchange plans instead of off-exchange plans. Many of them may have good reasons for not doing so, but I'm guessing that at least 1 million or so are leaving money on the table without even realizing it for no reason.

Again, this is not about minimizing the very real problem this causes for those 9 million people. It's about defining the problem.

Now, ramping up the APTC/CSR subsidies for the individual market (adding some assistance for those above the 400% FPL threshold and beefing up the amount for those below it), is one way (not necessarily the only way) to resolve that particular issue. Another possible solution would be, as Bill Clinton goes on to say, allowing older people to opt into Medicare (Hillary's "55+ opt-in" plan) and/or allowing people to become eligible for Medicaid (the 19 states which haven't expanded the program yet). Since both older people and lower-income people tend to be in worse shape, both of these would presumably remove large chunks of higher-risk people from the individual market risk pool, which in turn should help tremendously with the rates/deductibles for the remaining indy market enrollees. That, in turn, should help encourage a decent chunk of slices #23 (uninsured, eligible for tax credits) and even #24 (uninsured, ineligible for tax credits) to also sign up, reducing the uninsured population further yet.

Unfortunately, since a huge portion of the country is under the impression that "Obamacare" is a single program which refers directly to all 320 million Americans, the only headline getting any attention is basically "Bill Clinton sez Obamacare sux".

NOW, Clinton did go on to make two additional comments which are not entirely accurate:

"25 million more people have healthcare..."

...well, actually, the best estimates are that the total is around 21.3 million more people, so he overstated this by around 17%.

If you were an insurer, you'd say, "Gosh, I only got 2,000 people in this little pool. Eighty percent of insurance costs every year come from 20 percent of the people. If I get unlucky in the pool, I'll lose money." So they overcharge you just to make sure, and on good years, they just make a whopping profit from the people who are least able to pay it.

...well, actually, most of the insurance carriers have been losing money (at least within the individual market, even if they're making billions in profits overall); and even for those which are making a profit, thanks to the ACA's 80/20 Medical Loss Ratio rule, at least 80% of all premiums have to be spent on actual healthcare expenses, with anything under that percentage having to be returned to the enrollees by the carrier. In fact, just today, Neighborhood Health Plan of Rhode Island had to pay out $2 million in rebate checks to over 18,000 policyholders because they ended up only spending 77% of the premiums on healthcare costs.

Ironically, the part of Clinton's speech which shouldn't have been controversial got all the headlines, while the part which should have didn't.