I’m just popping in as I’m waiting for the last analysis of my 2nd dissertation paper to finish running through a couple thousand bootstraps (for those who don’t know what that means, consider yourself lucky!) But there is an interesting paper in the Journal of Risk and Insurance by Handon and Minicozzi, both employees of the Congressional Budget Office. They use the full 2017-2019 risk adjustment data set to estimate the cross subsidies various demographic groups insured by the ACA give to each other — ie which groups spend on average less than their premiums and which groups, on average, spend more. Premiums in the same geography for the same plan vary by age. The authors compare individual market enrollees to small group market enrollees.
We should expect cross-subsidization. Insurance is a transfer of resources from the lucky to the unlucky. Some groups are likely to be systematically lucky or systemically a bit unlucky.
They find lots of interesting things:
Our results suggest that women aged 55–64 helped stabilize the nongroup market
through high enrollment and relatively low spending. Men enrolled in the marketplace also subsidized other nongroup enrollees but to a lesser extent than expected. In fact, men aged 25–50 enrolled in nongroup plans spent 18% more than their counterparts enrolled through a small employer.
Takeaway #1 Employment is one hell of a screen for non-chronic health conditions.
Takeaway #2 Older women are comparatively cheap — this could be the result of either better aggregate health then similar age men or less adverse selection.
Mega Takeaway MEDICARE BUY-IN PROPOSALS LIKELY RAISE ACA PREMIUMS
Medicare buy-ins would transfer a net lucky group from the ACA to Medicare. More premiums are pulled out of the ACA pool than claims. This means the surviving ACA pool would be heavy on claims and light on premiums which would drive premiums up.
Now the welfare effects are messy as the 55 to 64 year olds would have messy experiences with Medicare or Medicare Advantage stratified by geography and individual health status and income. Under 55’s who are willing to buy benchmark plans or plans priced below benchmark and who receive premium subsidies are likely to be better off as things are no more expensive and likely cheaper. Subsidized individuals who want to buy above benchmark plans (likely to be less healthy on average) are worse off, and almost all non-subsidized buyers would be worse off.
Before the ACA, research suggested that young adults (those aged 21–35) in the nongroup market would subsidize older adults (aged 60 and older) under a 3:1 age curve for premiums. By contrast, we found that in the post‐ACA nongroup market, the age‐rating curve would shift up by around 5% if enrollees aged 55 and up were excluded from the market, while in the small group it would shift down by around 0.5%.
Damn, it is almost like health policy is complicated and heavily fact dependent.
Save the Date! Jan 9, 2024
Baud
The BJ Ladies Motto.
Baud
You best not be saying that we need to thank Joe Lieberman. That is something up with which I will not put.
trollhattan
@Baud:
{rimshot!}
RevRick
@Baud: Churchill wants his sarcasm back.
RevRick
David, is it true that about half of all health care spending is devoted to about 10% of the population?
AnneWith
@Baud: I believe that should be Fucking Joe Fucking Lieberman. (I may be a trifle bitter still.)
Lobo
So the easy answer to all this is? ;)
Kelly
I’m 67. My ACA insurance was cheaper than my Medicare + Advantage. ACA seemed simpler and completely adequate. I’d of stayed with ACA if that choice was available.
Here in rural Oregon Medicaid is great coverage. I’d like to see Medicaid for all.
Yutsano
I imagine this paper was more focused on the ACA effects. Was there any analysis of what would happen with the Medicare actuarial tables?
Betty
Assuming it wouldn’t put you out of work, I continue to hope and pray for a comprehensive Medicare for all program. Enough with all these complications and hard to make choices.
Ohio Mom
@Kelly: As I’ve said countless times, Ohio Family’s experience with Medicaid was heavenly. No coverage or payment hassles, ever. And it was completely free. A small taste of living in a civilized nation-state.
It was Ohio Son’s coverage as a disabled minor; now that his parents are retired, he is covered by a kluge of traditional Medicare and Medicaid. He has to pay toward his Part D coverage which I don’t understand, and neither apparently do the benefits administrators at the County Board.
I try not to think about it too much but our country’s health system is totally corrupt.
RevRick
@Betty: In an ideal world, if we were starting from scratch, M4A+ sounds perfect. But it’s the transition from where we are to get there that’s a conundrum. How do you manage it without blowing up the whole medical system?
Another Scott
@RevRick: The details always matter.
The idea of dropping the eligibility age over time makes sense to me (65 -> 60 -> 55, etc.) as a phase-in process.
I worry more about it being oversold. Anderson teaches us that there will have to be a gatekeeper to say NO or we’ll have companies demanding $50,000 a pill for stuff to keep people alive.
What about pregnancy and pre- and post-natal care? Medicare doesn’t do a lot of that…
Also, there are decent reasons to have the VA separate (war injuries), and probably some other health systems (Native Americans?) separate. But which ones? And for how long? And if they’re merged, what do we do about the mismatch in policies and benefits? And wouldn’t Medicaid for all be a better match in many cases (with less consumer paperwork)?
This stuff is complicated.
Bernie did a lot of damage by making it seem easy-peasy except for the CORRUPT DNC, etc., etc., and disappointing people (who should be on our side) when they found out it wasn’t easy-peasy.
Progress is incremental. We have to keep pushing for it…
Cheers,
Scott.
Ann Marie
Having just retired and dealing with signing up for Medicare, a Supplemental Plan, and a Part D (prescriptions) plan, I miss my employee plan. It was cheaper and simpler. To avoid paying even more for Medicare, I now have to file a form (or, rather, take said form to my local SSA office) and explain that, since I am retired, my income has gone down from what it was a year ago. Shocking concept. I get that all they have to base it on is my most recent 1040, but still.
Also, because of a mix-up with my adviser, I didn’t apply for my Supplemental and Part D until today, so they don’t take effect until February 1, which leaves me without prescription coverage for a month and hoping I don’t have an expensive accident. A national health care system or single-payer system makes more sense to me.
frosty
@Ann Marie:
This kind of nonsense is why I think Medicare For All is a stupid idea. It’s not a great health insurance system.
I’m with OhioMom: Medicaid for all would be better.
David Anderson
@RevRick: Plus or minus a few percentage points, yeah
Almost everything that involves people, preferences and choice follows a Pareto distribution (20% of the population use 80% of the whatever….)
David Anderson
@Betty: I’ll always have work — might need to shift my focus and my interests, but I’ll always have work even in an NHS or a Canadian Medicare system set-up.