Former President Bill Clinton’s unexpected remarks about Obamacare — delivered Tuesday at a Hillary Clinton rally in Michigan — were so negative, they might have felt more at home in a Republican stump speech.
“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,” Clinton said at a rally Tuesday morning in Flint, Michigan. “It’s the craziest thing in the world.”
Clinton’s remarks were, in some places, an exceptionally honest assessment of some of the health law’s struggles and weak spots, like how coverage has become unaffordable for some middle-class Americans.
But in other places, Clinton seemed to create new anti-Obamacare talking points. He accuses health insurers of “overcharging” customers so they can make “whopping profits” in the individual market — absent any evidence of this happening, and regardless of Obamacare regulations that prohibit this type of behavior.
Clinton is right — American health care really is a crazy system!
First things first: Clinton did remark that the “current system” we have for health care is ”the craziest thing in the world.”
Watching the remarks, it seems pretty clear to me that Clinton is talking more broadly about the American health care system, and the patchwork of insurance programs that cover most citizens. Here’s the full quote from the transcript.
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-business people and individuals who make just a little too much to get any of these subsidies. Why? Because they're not organized, they don't have any bargaining power with insurance companies, and they're getting whacked. 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.
At least to me, it seems that Clinton is describing Obamacare as one chunk of a nonsensical “current system.” And I think most Democrats — most Americans, really — would agree with this assessment of how health insurance works in the United States.
Obama, after all, wasn’t starting from scratch when he began pursuing health reform. There wasn’t a politically viable path to ending employer-sponsored insurance and moving to a simpler system. So Obama ended up pushing a patch that would make a Byzantine system work better — but certainly didn’t make a crazy system sane.
We have a health care system where access to coverage depends on where you live, where you work, how old you are, and how much you earn. When any of those variables change — you get older, move states, switch jobs — you switch to a new type of coverage with its own co-payments, doctor networks, and paperwork. You can’t really compare any of the different programs because they’re all structured so differently. And most of them offer very little transparency about how much health care will actually cost you after you sign up.
So, in a nutshell, yes! Our current system is confusing and complex — it was before Obamacare passed, and it still is afterward.
Clinton offered an important critique about Obamacare that most Democrats won’t
Much of Clinton’s remarks centered on a very specific group of Americans: Those who are uninsured and earn too much money to qualify for subsidized coverage — and who are exposed to double-digit premium increases.
“The people that are getting killed in this deal are small-business people and individuals who make just a little too much to get any of these subsidies,” Clinton remarked in Flint.
A bit of background is helpful here. The Affordable Care Act provides subsidies to purchase health insurance to people who earn less than 400 percent of the poverty line — $47,520 for an individual or $97,200 for a family of four.
These subsidies limit how much an individual has to pay for coverage. For example, someone earning $47,000 won’t have to spend more than 9.6 percent of her income on premiums regardless of the actual price. The government will kick in subsidies to cover the rest.
But there are many people who earn more than 400 percent of the poverty line, and they don’t have any sort of protection against high premiums. If an insurance plan jacks up rates by 20 or 30 percent — as many are this year, after losing money on the marketplaces — then a person above 400 percent of the poverty line has to pay the new price or go uninsured.
This middle-class population doesn’t get a huge amount of policy attention. We actually don’t know how many people are in this situation. The government hasn’t collected data on this issue, but some estimate it could be as many as 10 million people.
And Clinton is right: These people aren’t especially well-served by the health care law. They’re stuck deciding between whether to pay more and more for premiums or go without coverage.
Clinton’s new bizarre attack on Obamacare: insurers can make “whooping profits”
When Clinton criticized Obamacare for the people it left behind, I understood it. It didn’t make total sense politically, but from a policy standpoint he was pointing out an important weakness in a law the president has already said needs improvement.
But there was another part of Clinton’s remarks — where he raises the idea that insurers might jack up rates to increase their profits — that didn’t square with anything I know about Obamacare and its implementation. Here’s that part where Clinton is talking about the individual market.
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.
This critique is weird to me on two levels. First, the health care law includes a provision specifically meant to prevent this type of behavior. The health care law’s 80/20 rule requires insurance plans to put at least 80 percent of premiums toward actual medical care, leaving aside a maximum of 20 percent of the premium for administrative costs and profit. The Obamacare rules make it much, much harder for insurers to gain “whooping profits.”
It’s true that insurance plans are significantly increasing Obamacare premiums in 2017. Most insurers have so far lost money in the marketplaces, and are trying to price more accurately for coming years. The idea that they’re making whooping profits is quite at odds with what we know about how the marketplaces have fared so far — and the actual text of Obamacare itself.
I asked a spokesperson for Bill Clinton to clarify what Clinton meant when he referred to whopping profits. I have not heard back yet, but did receive a statement earlier in the day about the overall remarks.
“President Clinton spoke about the importance of the Affordable Care Act and the good it has done to expand coverage for millions of Americans” spokeswoman Angel Urena wrote. “And while he was slightly short-handed, it's clear to everyone, including President Obama, that improvements are needed.”