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Republican criticisms of Obamacare are extremely misleading

obamacare

On October 7, Vox’s The Big Idea published two pieces on the future of Obamacare — one that took a pessimistic view (by Republican consultant Avik Roy) and one with a more optimistic perspective (by Bob Kocher and Ezekiel Emanuel, who worked in the Obama White House on health care reform). Below, Kocher and Emanuel respond to Roy’s piece.

For Roy’s response to Kocher and Emanuel, see here.

A popular Republican criticism of the Affordable Care Act, repeated by Avik Roy in his recent Vox piece about the insurance exchanges, is that it has led to higher health insurance premiums. This is a myth. While insurance premiums have gone up, they have actually gone up less quickly than in the past and 20 percent less than the Congressional Budget Office predicted in 2009.

Moreover, for some people, especially those over 55, premiums have gone down. Critics like Roy omit the fact that commercial premiums were going up at a 9 percent per year on average for the decade prior to the ACA. Following the ACA, these increase have now slowed. Furthermore, part of the rise in premiums is a result of Republican obstructionism to policies like risk corridors. (Risk corridors, which are used successfully in Medicare Advantage and Medicare Part D, were supposed to reimburse plans by redistributing money from plans with lower-than-expected claims cost to plans with higher-than-expected costs; in some cases, they would offset losses with federal money.)

The talking point that individual market premiums have skyrocketed similarly ignores the data. This is only true for young people, with no medical problems, who purchased catastrophic coverage plans that cover less than 60 percent of expenses.

Yes, they pay more today. But they are getting plans that cover more of their costs (at least 60 percent), have an out-of-pocket maximum of $7,500 per year, cover more things, have no lifetime maximum benefits, and offer free preventive care. Older people, because of 3-to-1 age bands (the allowable ratio of premiums paid by the oldest members relative to those paid by the youngest) are often paying less. And providing more affordable coverage to older people who are more likely to need coverage is a good thing.

Finally, the argument Roy makes that Medicaid expansion is somehow not valuable because it has not improved health outcomes in two years makes little sense. It would have been shocking if health outcomes changed at a population level in only two years. Medicaid patients are younger and healthier than Medicare patients, so it takes much longer to show benefits from access to primary care than in an older, sicker patient.

The paper Roy cites in making that claim also concludes: "[Medicaid] did increase use of health care services, raise rates of diabetes detection and management, lower rates of depression, and reduce financial strain." While Medicaid can certainly be improved, it is hard to imagine that people would be better off without it.

Fortunately, we agree with Roy that "bolstering the private insurance market, and focusing federal subsidies on the poor and the vulnerable," could improve exchanges. Specifically, we endorse his recommendation to revisit age bands and expand subsidies for the poor and vulnerable (as we noted in our original piece). These policies deserve bipartisan support. And extending, or adequately funding, programs like reinsurance and risk corridors would go a long way toward creating stronger and more competitive private insurance markets.

Bob Kocher is a partner at Venrock, a venture capital firm. Ezekiel Emanuel is vice provost at the University of Pennsylvania and author of Reinventing American Health Care. Both worked in the White House on the Affordable Care Act.


The Big Idea is Vox’s home for smart, often scholarly excursions into the most important issues and ideas in politics, science, and culture — typically written by outside contributors. If you have an idea for a piece, pitch us at thebigidea@vox.com.