ACA, adverse selection, crony capitalism, Don Boudreaux, Medicare, Megan McArdle, Obamacare, rent seeking
Disconcerting news regarding the administration of the ACA just keeps on coming. The so-called “risk corridors” represent a bailout for health insurers for whom Obamacare premium revenue proves inadequate. Sure enough, but more interesting is how the Obama administration attempted to manipulate several provisions of the law on reimbursement in order to keep insurers happy after other changes with negative implications for their risk pools. In addition, when insurers expressed alarm about the “budget neutrality” of the corridors, the administration backtracked on that position. “… the administration had a choice: provide a bailout, or face the unpleasant prospect of having insurers price their products honestly.” The unfolding of these events is detailed in Emails Show Cozy Government- Insurer Alliance….
Don’t get too excited about the improvement in Medicare’s finances under the ACA. The chief actuary for the Centers for Medicaid and Medicare Services says that the ACA’s Medicare changes aren’t sustainable. Reimbursement rates under the ACA are inadequate barring “an unprecedented change in health care delivery systems and payment mechanisms.” In other words, an unlikely advance in productivity will be necessary in order to make Medicare’s finances work.
A few days ago, I posted about the Halbig vs. Sebelius District Court decision here, highlighting Jonathan Gruber’s one-time defense of the ACA’s rules that premium subsidies could be paid only on policies purchased on state exchanges. More recently, he claimed that the rule was not the intent of the legislation. Here are some further thoughts from Don Boudreaux on Gruber’s memory lapse, in which he links to a piece by Megan McArdle. Boudreaux:
The very claim that such a simple “mistake” infects the ACA calls into question the competence (or the incentives, or both) of elites, both political and intellectual, who seek ever more power for government.