David Sirota says that the big winners under Obamacare are the big insurance companies.
Read this fast, as it will be online only for 20 hours, then goes behind a paywall.
Or copy it and save it.
Here is a sample from one of our great investigative journalists:
“In this made-for-TV cartoon series, the battle over the new law has been depicted as a fight between competing small guys. Bam! Democrats insist opponents of the law don’t care about the uninsured, even though the new law will leave millions of people without health coverage (http://www.washingtonpost.com/blogs/wonkblog/wp/2013/06/07/obamacare-leaves-millions-uninsured-heres-who-they-are/) . Ker-pow! Republicans claim that proponents of the law don’t care about struggling businesses, even though America’s for-profit employer-based system puts U.S. businesses at a competitive disadvantage (http://www.businessweek.com/stories/2009-03-12/u-dot-s-dot-health-cares-competitive-disadvantagebusinessweek-business-news-stock-market-and-financial-advice) .
“Now, as a Wiley Coyote government hurtles toward another fiscal cliff (http://billmoyers.com/2013/08/28/hold-onto-your-wallet-fiscal-cliff-2-0-is-coming-soon/) and as cable news substitutes red-versus-blue prognostication for fact-based health policy reporting, few in D.C. bother to mention that Obamacare really isn’t designed with patients, most employers or even health care in mind. It is primarily designed to further enrich one tiny handful of businesses: health insurance corporations.”
Diane Ravitch's blog 
I saw this earlier today. I see David’s point personally have reservations about the ACA but I also feel that what the Republicans are doing is wrong and dangerous…and their objectives are much broader than fighting the bill.
Everyone knows that …
But it will help some people in the meantime, while we work toward something better.
And so it goes …
Yes, Jon, this is no big surprise. It’s no different than all of the $$$ in education going to for-profit companies like Pear$on.
I have a very sad theory that, in actuality, Mitt Romney was a phony candidate, & that Obama–secretly (or not)–supported by Big Bu$ine$$–was meant to suck up all our (sucker!) votes.
In reality, all of the REAL Democrats (Alan Grayson, Elizabeth Warren, Al Franken, Wendy Davis, & the brave Wisconsin group who fled the state) are, unfortunately, few & far between.
But that’s just me.
I agree. Vermont is on the path to take this and go single payer with it. I hope New York will follow.
Vermont is sounding more and more like heaven.
Diane, you are a great, and i mean GREAT, editor — I’d suggest you’d bring unsung news sources on education and other subject matter to the fore…. Thank you for your tuned voice! Alex
Please don’t start in on Obamacare. I can barely keep up with the sheer volume of your important Common Rotten Core posts.
Obamacare or the Affordable Care Act, is many steps forward for the country. Sirota is expected to attack _anything_ from the left, but in pragmatic terms, the ACA is a just piece of legislation that will help _millions_ of Americans. Sure, the insurance companies will expand their customer base, but looking at that alone is myopic in my judgment. Insurance companies have to abide by many strict new rules to get these customers. And on top of that, they don’t get to keep raising premiums beyond a particular point just to pad the salaries of their executives (the 80-20 rule).
I would prefer a single payer system, but the changes from the ACA are very positive, and I think we should all embrace them, while pushing for something even better.
Did you read the article?
Yes, I think most of us realize it will benefit the insurance companies, but at least all Americans will have a chance for coverage. Gradually, the problems will be worked out and I believe there will be a gradual move towards single-payer, or Medicare for everyone. Obama tried for this, but what we have is the only thing he could get through.
Nothing, absolutely nothing, is worse than what we had: People with cancer begging for medications and care and people losing their homes to care for a sick child. Our country simply can’t go back to that. And it won’t.
Not exactly true. Obama never tried for single payer. And even the “public option” that he allegedly “tried for” was negotiated away in the opening rounds behind closed doors. It was already dead even as Obama was (mendaciously, of course) claiming he wouldn’t sign a bill without it.
Folks might want to think about the basic problems in insurance that arise from the fundamental information asymmetry between the potential purchaser of insurance and the insurance organization: the potential purchaser of the insurance can know a great deal more about the risks of a loss than the insurance organization.
Let’s look at unemployment insurance because it is a little more obvious in that case. Acme insurance has set up a storefront to sell unemployment insurance to individuals walking into the store. Who would you expect to walk in to buy? Not tenured professors, not people whose jobs were protected by senority, not people who are very secure in their jobs, but people who know that they are likely to be unemployed in the near future. If Acme raises the premium, only those that are sure they will be unemployed in the future will walk into the store. This is known as the adverse selection problem in economics.
The solution to this problem is to not allow people to choose to buy the insurance. The adverse selection problem is so severe in unemployment insurance that there is no private market, the government provides it and does not allow anyone to opt out of the decision. It works the same way in health insurance. The relatively healthy will pay for the care of the relatively sick. Without the mandate, the relatively healthy do not buy insurance and the relatively sick go without care or recieve expensive care because they do not recieve appropriate care at appropriate times.
So you’re saying you support the mandate?
It’s kind of funny how it was originally a Republican idea, and now it’s the Republicans who are hollering about the “gubmint takeover!!!” because of the mandate.
Yes I am in favor of the mandate. It is the only way to fully address the adverse selection problem and will allow us to move away from the other way we have traditionally tried to handle adverse selection by tying health insurance to employment.
teachingeconomist:
The mandate to purchase insurance, which I personally consider unconstitutional, isn’t the only way to deal with your “adverse selection” problem. A better approach would be a Canadian-style single-payer system funded by taxpayers. If we had our priorities straight, we would at least provide Medicare for all.
Government-funded dental care should also be available to all children.
You could certainly force all citizens to pay additional taxes instead of insurance premiums. That is the way unemployment insurance works. The key is that the individual is not allowed to choose.
TE:
Excellent example. I agree 100%.
I also believe that there needs to be a mechanism that separates out medical expenses that are due to discretionary and risky behavior – an excess risk pool so to speak. Should everybody be forced to pay for my love of skiing, dirt-bike racing and binge drinking?
That’s a very good point.
Thanks for posting a very concise and understandable explanation.
Your welcome. I am glad you found it useful.
If this is a benefit for the insurance companies (and it sure looks like it) then Americans will have a chance for nothing. It will be premiums paid to corporations with healthcare services unaffordable for the working citizen at $12,000 a year. Low income people with cancer will continue to beg for meds and care because the deductibles won’t be manageable.
We have both an education and health insurance (not health care) corporate control drama going on here. It is creepy in similarities. We must remain awake to this however painful, and it does hurt to take it all in because it invokes a feeling of powerlessness. We need a moral/ethical shift that focuses us on our humanity, our children & their education, our guaranteed access to health care for everyone and more. This has to happen. The moment is NOW. We see the alternative with Shutdowners.
+1
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It’s nothing but corporate welfare. People will be even worse off with it than before.
sounds like another swindle
Back in February, Paul Craig Roberts had this very lengthy piece about Obamacare. He wrote only the first part and the last part–the important middle section was written by somebody very knowledgeable about the law by chose to be anonymous.
Read it and weep:
http://www.counterpunch.org/2013/02/05/obamacare-a-deception/
As someone with very low income now, I am annoyed at the healthcare bill. Coverage even with subsidies is too expensive for many older people. It is a very small first step to a proper health care plan, but I don’t think we will ever take that next step.
The good news is that Medicare is pretty generous for the elderly. The hope is that children might benefit from the more general subsidy program.
Yes, corporate America runs our country. May it be said though that we have the worst health care system in the world according to the World Health Organization who looks at all aspects of the system yet we pay almost twice as much as other countries for it. Too, we are the only industrial country in the world, outside of South Africa, that does not have health coverage for ALL of its citizens. And yes, a single payer system would provide enough savings to cover ALL U. S. citizens with coverage and it does not have to be even run by the government. Switzerland has a corporation to run their coverage. Even central American poor countries provide for basic coverage for their citizens. Again, corporations run our country.
I might add that when people say the government is not as efficient as private enterprise I would much rather pay Kathleen Sibelius her almost two thousand dollars a year salary than the several million dollars paid to the health care CEOs. Medicare has about a 3% overhead while the health care providers have between a 20 to 25% overhead. Check it out yourself.
The ACA is far from perfect. I agree and undoubtedly benefits the corporations. I have not read the said article and have not studied its contents but what with what happens in DC now, it would seem probable.
Having said that, I agree that it is a step in the right direction for providing care to more of our citizens. Time alone will tell how well it works. Much of the very same arguments launched against it are the very same arguments lodged against Social Security and Medicare but my belief is that most people now would not wish to get rid of those. And yes, some claim they are heading for a “train wreck” but Social Security is solvent for many years and even then could be saved if the more wealthy had to pay the same as the rest of us, taxed at ALL their income.
The debate will continue of course but when this all started I did study what was going on in some detail, not like scholars who have spent more time at it but believe in FAR more detail than those who denigrate it completely now.
I just noticed. Kathleen Sibelius makes just under 200 thousand a year. I believe it is in the vicinity of $197,300 but am relying on my memory which is very fallible. It has been some time since studying this.
I was at your talk last night at Occidental and wanted to say hello but I was one of the last to leave the auditorium and by the time I did, all the books were gone and the line to talk to you still long. I will get my book at my local book store. It was a great and inspiring talk!
One problem with the Republicans wanting to defund Obama care for a year – Obama has already delayed federal mandate for businesses but refuses to delay it for people. Too much hypocrisy all around. We have very few friends among either the Dems or the Repubs in office.
It’s amazing how Obama promoted himself as being a breath of fresh air in Washington yet, has proven to be the same old same old.
Hum, let’s see. Costa Rica offers free health care to everyone, government paid, citizen or not, and overall has better health outcomes for all not just the select few who can afford it. Costa Rica has had no military since, I believe 1948.
Connection?????
OK, here is another completely different take. Written by an industry insider and whistle blower. http://www.michaelmoore.com/words/mike-friends-blog/beginning-end-major-health-insurers
I think Wendell Potter is far closer to the truth of the matter than David Sirota.
Agreed. If sirota wants to dig for a story, there is plenty to uncover on the other side.
I am less clear on this. My recent experiences with my wife’s two knee replacements and my own apnea treatment suggests that my insurance company does a pretty good job negotiating rates compared to the face rates. Would a single payer do as well? Would small insurance companies do as well? We are in unknown territory and it seems to me that, as with education reform, incremental changes are a better way to go than massive bets.
Amen!!! My hope would be that people would delve into the problem in more depth.
We will know if Obama tries that “Grand Bargain” nonsense to resolve the shutdown, that BOTH sides orchestrated it in order to force “austerity” measures on the American people.
I don’t trust ANY of those people in D.C. as far as I can throw them.
It is true that the Affordable Care Act is designed to benefit insurance companies. But please keep in mind why this is the case: it was the only way the bill could be sold to Congress! A single payer bill or, alternatively, a bill that proposed direct caps on medical costs, or a combination of both, would have failed both houses of Congress. Obama did the only thing he could do to keep his promise to reform health care, which was to resurrect a Republican proposal that forced people to buy private insurance (albeit in a publicly organized market), and which provided subsidies for the lowest in income. Even that proposal barely passed Congress.
Is this a good system? Not particularly. But it’s way better than what we had. I am not going to criticize Obama for not doing the impossible. Politics is the art of the possible, and the ACA was about the limit of what was possible in 2009-10. I say we rejoice that we got this far, and start working for even better solutions after the next election.
My $0.02.
I posted Diane’s link on FB and a couple of friends of mine who’ve studied the ACA in depth said this:
“…this is an interesting article and makes knee-jerk supporters like us take pause. Yes, it has obviously been a boon to the insurance industry from the get-go because of mainly the added customers, where a much more efficient (ala Medicare) single payer plan would not have been. But, for one, the writer ignores the ACA provisions designed to reduce health care costs at the provider level (there are many) and the provision requiring insurers to provide benefits no less than 80% of their revenues, and ignores the millions who will have some coverage even when they are at their sickest or with pre-existing conditions. The writer is sold on the prediction in his penultimate paragraph : “at least until the insurance oligopoly’s premiums become unaffordable and/or the list of covered health services is whittled down to nothing.””
And:
“The boon that Obamacare is for insurers was mentioned from the very beginning. What we need in this country is a single-payer system, but there was NO way that was going to get through Congress. Too radical. Too fair for lower-income people. Too fair for the middle class. Not enough of a boon to the insurers. So Obamacare was the next best thing.”