Without the least hint of irony, Avik Roy (a senior fellow at the Manhattan Institute and health-care advisor to Mitt Romney) has written an article for National Review called “How Obamacare Harms the Poor” (via subscription). The main thrust of his argument is that Obamacare (that is, the Affordable Care Act) will expand Medicaid, which isn’t as good as commercial insurance, since many physicians don’t accept it. Therefore, Roy suggests, because the poor would be better off with private insurance than with Medicaid, they are better off with no insurance than with substandard public insurance Obamacare would provide. Roy spices up his discussion with some supply-side economics: Obamacare will increase insurance costs for some businesses, which will cause them to cut back on hiring, which is bad for poor people. (This, not incidentally, is the same discredited argument the National Review crowd uses against the minimum wage.) And he throws in a few miscellaneous potshots, complaining, for example, that Obamacare includes an individual mandate while also complaining that its mandate isn’t strong enough to work. But, overall, Roy seems to believe that the poor, and probably everyone else, is better off with the status quo.
Roy begins his diatribe with the story of a boy who died of a toothache. The toothache was from an untreated abscess that eventually infected the boy’s brain. Roy claims that the abscess was not treated in a timely manner because the boy couldn’t find a dentist who would accept Medicaid. Now, it is a scandal that Medicaid does not reimburse providers for the full cost of treatment. (Roy says that the reimbursement is fifty percent of cost; it’s more like sixty, but never mind: it’s definitely less than one hundred.) Medicaid is subsidized by private insurance and (to some extent) Medicare. But since Medicaid patients tend to be money losers, many doctors and dentists won’t take them. Roy points us to some statistics showing that people on Medicaid have poorer health outcomes than those who have private insurance. What he does not quite explain is how the dead boy would have fared better with no insurance at all, and surely that is the relevant question.
As it happens, there was an article on the front page of yesterday’s New York Times that addresses that question. Pam Belluck reports on a study published in the New England Journal of Medicine that found that the number of deaths for people age twenty to sixty-four decreased in three states that expanded Medicaid eligibility. During the same period three neighboring states that did not expand their Medicaid programs saw the number of deaths for the same age group go up. (The numbers were adjusted for population growth.) Obamacare would have the federal government pay for every state to expand its Medicaid program the same way the first three states did. In its recent decision on the law, the Supreme Court ruled that states were free to refuse this expansion without losing the federal money they already receive for Medicaid, but this study strongly suggests they would be foolish to do so.
Roy’s explicit comparison of Medicaid to private insurance might lead one to suppose he thinks Medicaid should pay doctors as much as private insurance does. Or that he is advocating something even more obvious: a national single-payer insurance program. But no. According to Roy, Obamacare will not only hurt the poor by forcing them onto Medicaid; it will also ruin the middle class. His argument for this claim is odd, but let’s let him speak for himself. “Not all health coverage is created equal,” he writes.
A plastic card in your wallet with the word “insurance” on it doesn’t guarantee that you’ll have access to the medical care that you need when you need it. And that is the fundamental problem with Obamacare: It expands coverage without any regard to the value, or the quality, of that coverage.
And how does Obamacare ignore value and quality?
[I]t requires regulated health-care plans to provide insurance with a generous minimum “actuarial value”—the percentage of total average health-care costs that the plan covers—forcing plans to reduce their co-pays and deductibles, in exchange for higher premium.
Far from providing “one-size-fit- all insurance plans,” as Roy claims, Obamacare will require that there be several different levels of minimum coverage at different prices. But its minimum-coverage and minimum-actuarial-value requirements will insure that the plastic card in your pocket does guarantee the care you need—and the care most people expect their insurance providers to cover.
Roy also claims that Obamacare will negatively affect “flexibility,” by which he means not the policy-holder’s flexibility but his or her employer’s.
If you have a chronic disease such as diabetes, or if your daughter has multiple sclerosis, a prospective small employer will be especially reluctant to offer you a job, because Obamacare will leave that company with no flexibility in the kind of health care it can offer, thereby increasing its financial risk (italics mine).
In other words, under Obamacare the business will have to offer you benefits that will cover you or your daughter’s chronic disease and will not have the “flexibility” not to. Roy is looking at this exclusively from the employer’s point of view. And that’s the real problem with Obamacare for people like Roy and Romney: it may give the consumer more, but it puts more obligations on businesses, obligations whose expense will have to be passed on to the consumer. So why rock the boat? Better a few more poor people without insurance than a reform law that makes it harder for business owners to stop insuring their employees.