'Sticker Shock' Over Obamacare Bolsters Single-Payer Argument

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ObamaCare First Deadline Passes

New reporting by AP underscores systemic problems with healthcare system based on for-profit insurance model

As the political uproar surrounding the Affordable Care Act has played out over recent months, one single fact remains: the private insurance model—on which the law widely known as Obamacare is based—is more complicated, more expensive, and provides less coverage than a simple, “everybody in/nobody out,” single-payer model that almost every other advanced country in the world enjoys.

Single Payer next exitAnd even within the debate about whether or not Obamacare is a “step forward” or a “step back” for healthcare delivery in the U.S., what’s become increasingly clear—as was predicted by progressive critics of the Obamacare model—is that though portions of the law undoubtedly improve the kinds of coverage that some people receive, others are still excluded from the system entirely and among those who are now purchasing insurance for the first time in their lives many will face “sticker shock” at the high premiums or out-sized deductibles.

As new reporting by the Associated Press highlights:

As a key enrollment deadline hits Monday, many people without health insurance have been sizing up policies on the new government health care marketplace and making what seems like a logical choice: They’re picking the cheapest one.

Increasingly, experts in health insurance are becoming concerned that many of these first-time buyers will be in for a shock when they get medical care next year and discover they’re on the hook for most of the initial cost.

The prospect of sticker shock after Jan. 1, when those who sign up for policies now can begin getting coverage, is seen as a looming problem for a new national system that has been plagued by trouble since the new marketplaces went online in the states in October.

What the AP goes on to describe is how the economic hardships that most middle- and low-income Americans experience on a daily basis compel them to choose insurance policies with the lowest monthly premium, but don’t realize that the huge deductibles attached to those plans mean that they may have huge medical bills to pay before their coverage kicks in.

In addition, because the state-level exchanges from which participants in Obamacare must purchase their plans are so complicated, many consumers—especially those with little experience navigating the private insurance marketplace—won’t possess the technical or financial savvy to calculate the best plan for themselves or their family.

“I am so deeply clueless about all of this,” said 29-year-old Adrienne Matzen, an actor in Chicago, told the AP. She’s been  mostly without insurance since she turned 21, but must now figure out how to receive coverage she can afford while living with two chronic illnesses and earning less than $20,000 a year.

Someone like Matzen—who ultimately may or may not be individually better off under the ACA—exemplifies why the overall system is still so far from the ideal that progressive critics of Obamacare say is possible.  The choices available to her  depend on the state she lives in, her ability to navigate the choices, and a host of other complex factors.

As the AP reports: “The complexities of insurance are eye-glazing even for those who have it. Only 14 percent of American adults with insurance understand deductibles, according to one recent study.”

On the other hand, a single-payer or Medicare-For-All approach, according to its proponents, would cut out both the complexity and an enormous part of the expense that has historically plagued private insurance industry and will remain under Obamacare.

This summer, Gerald Friedman, a professor of economics at the UMass Amherst, released a study showing that a single-payer system like the one described in Rep. John Conyers’ HR 676 could save as much as $592 billion a year in U.S. healthcare costs.

According to his fiscal assessment, those savings would be more than enough to cover all 44 million people the government estimates will be uninsured in the coming year while also improving the existing coverage for everyone else. “Paradoxically, by expanding Medicare to everyone we’d end up saving billions of dollars annually,” Friedman said of his findings. “We’d be safeguarding Medicare’s fiscal integrity while enhancing the nation’s health for the long term.”

And as Dr. Steffie Woolhandler, a spokeswoman for Physicians for a National Health Program, recently explained on Democracy Now!:

[Single payer/Medicare for all] means you would get a card the day you’re born, and you’d keep it your entire life. It would entitle you to medical care, all needed medical care, without co-payments, without deductibles. And because it’s such a simple system, like Social Security, there would be very low administrative expenses. We would save about $400 billion, which would allow us to afford the system. I mean, I just want to remind you that when Medicare was rolled out in 1966, it was rolled out in six months using index cards. So if you have a simple system, you do not have to have all this expense and all this complexity and work.

  • NOTgaltHouse

    Obamacare is crap. The insurance companies wrote the bill; and we have to pay it. Or, we can get a plan like Canada has, and every other civilized nation of the world has…Yeah right.

  • sunnyaria

    I have to say that I agree. Single payer universal healthcare for me.

  • didactic1

    By 2016, the high costs of ACA and the costs of overlapping healthcare systems like VA, Medicaid, state health systems, Medicare will allow folks to demand that the Demos at least transition to single pay. This demand can work if Ms Clinton and anyother would be Prez on the center left understands that not a dime, minute or vote will come from the “usual” blue voters if a Single Payer isnt the central domestic goal of the Dem Party to replace ACA and the other current flawed systems. Merge them all, have the largest possible patient base, eliminate most fees for servicer and put the medical specialists/big pharma/ and med eq makers on a wealth limits diet if they want to practice in the US of A.

  • OldTulsan

    Section 1332 of the PPACA allows states to request innovation waivers from the Secretary of Health and Human Services after 2017.

    States can use their innovation waiver to set up an alternative healthcare system, such as a single-payer system.

    Section 10323 of the PPACA gave Libby, Montana “Medicare for All” on July 1, 2011 because of widespread asbestos-related illnesses from W.R. Grace’s vermiculite mine.

    Every man, woman, and child in Libby, Montana has “Medicare for “All”

    • kevinzeese

      It is unfortunate that the waivers are not allowed until 2017, after the exchanges are put in place. States are spending tens of millions (in small states) to set up the exchanges. Do you think they will discard that massive investment?

      A big problem with state-based single payer is that is will require Congressional waivers of a number of laws in order for a state to actually have a single payer system. Vermont is putting in place a universal healthcare system but it will not be single payer. As a result Vermont will not have the savings that a real single payer system will have.

      The sooner the failure of the ACA becomes evident, the sooner the US can put in the only real solution. The problems with the initial roll-out and the website are problems that we will see arise in other contexts as the ACA creates a complex and expensive bureaucracy that will anchor the system and inflict constant problems for all. Medicare for all funded by a single payer is the only solution — from that change we can then work to improve Medicare. Until ACA fails the insurance companies, pharmaceuticals and for-profit hospitals will all get wealthier where the healthcare of all but the wealthiest Americans declines.

  • Trilby16

    One thing nobody understand is the “deductible.” Last year I was considering my company’s high deductible with HSA insurance option. So I called my insurer for the year just ending and asked how much of my deductible I had met. They told me $700-something. Which is weird because I actually used more health care than usual that year. I had mos surgery to get a basal cell skin cancer removed, for instance. I paid maybe $250 out of pocket and the rest was covered by insurance. And that was just one thing of several. So I have no idea how they calculate the deductible, and I bet you don’t either! For all I know it varies by insurer or by plan, so we can’t ever know with certainty, yet we have to make decisions!

  • OldTulsan

    For those who blog on other sites, , here’s some links on Canada’s single-payer system…

    http://www.commondreams.org/view/2013/11/22-1 | Common Dreams
    21 Ways the Canadian Health Care System is Better than Obamacare

    “by Ralph Nader

    Dear America:
    Costly complexity is baked into Obamacare. No health insurance system is without problems but Canadian style single-payer full Medicare for all is simple, affordable, comprehensive and universal.

    In the early 1960s, President Lyndon Johnson enrolled 20 million elderly Americans into Medicare in six months. There were no websites. They did it with index cards!

    Below please find 21 Ways the Canadian Health Care System is Better than Obamacare.
    Repeal Obamacare and replace it with the much more efficient single-payer, everybody in, nobody out, free choice of doctor and hospital.

    Love, Canada

    Number 21:…”

    http://www.commondreams.org/view/2013/11/27-4
    America, Want Freedom of Choice? Try Public Healthcare Like Canada | Common Dreams

    There is a common myth that thousands of Canadians come to the U.S. for medical treatment…

    http://content.healthaffairs.org/content/21/3/19.full
    Phantoms In The Snow: Canadians’ Use Of Health Care Services In The United States

    “…The Medicare refugee story is harnessed in Canada to promote the message that the Canadian health care system (known as Medicare) is chronically under-funded; the refugees are but one prominent symptom. The Canadian “under-fundists” are, however, divided as to the appropriate response. The many who support the fundamental principles on which Canadian Medicare is built argue that Canadian waiting lists and care seeking in the United States demonstrate the need for new public funds to increase capacity and services. While “evidence” in the form of Medicare refugees might be new, this debate about the level of public funding has been part of the dialogue between Canadian providers and provincial payers throughout Canadian Medicare’s history.4

    But the putative refugees are also pawns in a debate driven by Canadian opponents of universal public funding, who wish to expand the role of private financing. This debate grew more intense during the 1990s as provincial payers increasingly constrained their health care budgets.5 News headlines suggesting that Canadians spend more than $1 billion annually south of the border have been cited to bolster the argument that private funding would reduce the pressure on the public system, thus reducing both public waiting lists and the flow of Canadians heading south for care. As a bonus, that $1 billion would stay at home.6…”

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  • MechyTechy

    My understanding of the way in which the UK started their universal healthcare system is that they voted to take the money they had been spending on WWII and redirect it to finance healthcare. I think that is an outrageously simple example to follow. War money to healthcare. Single payer. Simple. No plan should require “deductible” to be paid by patient. That effectively prohibits patient from seeking medical care, particularly in the case in which premiums for Medicare are paid from Social Security benefits.
    Unemployment forced many into an unintended retirement, creating a situation for retirees in which their is not money left to meet deductibles. Another of the many ways in which social programs are currently rigged to benefit the wealthy, rather than the patient.