aside The Republican’s Big Lie: Obamacare Is On A Death Spiral

Anyone who watched the TV news on 3/7/17, heard the republicans talking points that Obamacare is on a “death spiral” echoing the words of the Aetna CEO who has been resorting to this rhetoric. And of course, this is not true.

The words “death spiral” is a specific insurance terminology which refers to the inevitable cycle where insurance premiums keep rising dramatically to where more and more young healthy adults start dropping out of the insurance market until the system collapses.

This year of 2017, there has been a record number of Americans enrolling to purchase health coverage made available through the ACA, the Affordable Care Act or Obamacare which puts the lie to the republicans’ claims that the ACA is in a “death spiral” cycle.Image result for photos of republicans rollout of their health care plan

Yes, there are flaws with the ACA which are imminently fixable, if there was a bipartisan consensus in the US Congress to do this. For example, the US congressional representatives could for once, adequately fund the ACA risk corridors as required, within the ACA law. Again, “risk corridors” is an insurance term and it is NOT A BAILOUT as the republicans are prone to call it. By not funding this ACA requirement in 2016, the republicans were able to deliberately cause the recent premium and deductible increases with some insurance companies having to withdraw from the ACA marketplace.

Here is a link to a Politifact report which calls Senator Rubio’s claim a lie, that funding risk insurance corridors for the Affordable Care Act (ACA) is equivalent to a corporation bailout. (Marco Rubio: We ‘wiped out’ Obamacare ‘bailout fund’) Image result for pro obamacare political cartoon

Here is what Robert Pear wrote about this in his 12/9/15 NY Times report:”A little-noticed health care provision slipped into a giant spending law last year has tangled up the Obama administration, sent tremors through health insurance markets and rattled confidence in the durability of President Obama’s signature health law.”

The attack stems from two years of effort by Senator Marco Rubio and others (Jeff Sessions) in Congress to undermine a key financing mechanism in the law. So for all the Republican talk about dismantling the Affordable Care Act, one Republican presidential hopeful has actually done something toward achieving that goal.

Mr. Rubio took credit for republican led efforts against the so-called risk corridor provision of the health law but this plan in limiting how much the government can spend to protect insurance companies against financial losses has shown the effectiveness of quiet legislative sabotage. (Sabotage was really led by then Senator Jeff Sessions.)

The risk corridors were intended to help some insurance companies if they ended up with too many new sick people on their rolls and too little cash from premiums to cover their medical bills in the first three years under the health law. But because of Mr. Rubio’s efforts, the administration says it will pay only 13 percent of what insurance companies were expecting to receive this year. The payments were supposed to help insurers cope with the risks (called adverse selection) they assumed when they decided to participate in the law’s new insurance marketplaces.”

“Mr. Rubio’s talking point is bumper-sticker ready. The payments, he says, are “a taxpayer-funded bailout for insurance companies.” But without them, insurers say, many consumers will face higher premiums and may have to scramble for other coverage. Already, some insurers have shut down over the unexpected shortfall.”

PolitiFact calls Senator Rubio’s claims a lie. (Marco Rubio: We ‘wiped out’ Obamacare ‘bailout fund’) 

Image result for photos of republicans rollout of their health care plan

For those who are active in the resistance, it is crucial to make those contacts with our legislators, during this week of 3/8/17 while the republicans are rolling out their ACA replacement plan.

Resources:

The main US Senate phone line 202-225-3121 (202-224-3121) or  YOU CAN FIND PHONE NUMBERS FOR EVERY SENATOR HERE. 

Find Your Representative · House.gov – U.S. House of Representatives

More Data To Counter Republican Talking Points:

As per a 1/10/17 AP Fact check: Obamacare is not in a “death spiral:”

President Donald Trump says that President Barack Obama’s health care law “will fall of its own weight.”

House Speaker Paul Ryan says the law is “in what the actuaries call a death spiral.”

And Senate Majority Leader Mitch McConnell says that “by nearly any measure, Obamacare has failed.”

“The problem with all these claims: They are exaggerated, if not downright false.”

“Congressional representatives are working to portray it as a mess of Democrats’ making, and themselves as the ones who will clean up that mess.”

“In the process they are exaggerating the law’s very real problems, according to health care experts, who largely believe that the Affordable Care Act’s troubles with high prices and lack of competition could be addressed with bipartisan solutions.”

“Republicans, who’ve gained political advantage from campaigning against the law since its passage in 2010, aren’t interested in playing along. Instead they’ve denounced the law and made the case to repeal it, although there are signs some are getting cold feet.” 

“But with Republicans in the majority and driving the agenda, here’s a look at some of the GOP claims about the law, and how they compare with the facts:”

TRUMP, RYAN AND MCCONNELL: The law will “fall of its own weight,” is in a “death spiral” and “has failed.”

THE FACTS: “Experts agree that the law is not currently in a “death spiral,” an actuarial term that refers to a vicious cycle when rising insurance costs force healthy customers out of the marketplace, resulting in still higher prices, which cause even more customers to bail, etc., until the system collapses.”

The American Academy of Actuaries itself disputed the “death spiral” claim (in mid January 2017). The group provided a statement from its senior health fellow asserting that high premium increases in many states this year “do not necessarily indicate that a premium spiral is occurring” and could be a one-time adjustment.”

RYAN: “You cannot fix a fundamentally broken law; you’ve got to replace it.”

THE FACTS: “Experts agree that Congress could fix the law’s problems, should it choose to do so. Indeed many argue that some of the law’s problems can be traced to the decision by Obama and Democrats to push it through on a partisan basis – alienating Republicans who have refused ever since to participate in any attempt to tweak the law to improve it, as would be necessary with any program of such size and complexity.”

“Some predict that when Republicans get through with their repeal-and-replace effort, what it will really amount to will be an improved Obamacare – even if they don’t admit it.”

“The health care exchanges, for example, could be improved with changes aimed at getting more young and healthy people to sign up, such as giving insurers more flexibility to charge older people higher prices.” (This means that younger folks would be charged much less. But without a mandate, this plan is unrealistic.)

“You could, I think, relatively simply address the issues that the exchanges have,” said Dan Mendelson, of Valere Health, a health consulting firm, noting that other major programs including Medicare have been tweaked repeatedly since their creation. “If you freeze a program in a point of time, it is likely to have problems, and that’s exactly what’s happening.”

MCCONNELL: Obamacare “didn’t lower costs, it didn’t increase choice.”

THE FACTS: McConnell’s comments are true in part.

“The first five years of Obama’s presidency saw historically slow growth in U.S. health care spending. Some credit the global recession. Individual consumers in the law’s marketplaces, meanwhile, face higher premiums this year, though subsidies protected most customers from the increases.”

“And while the Affordable Care Act did increase choice initially in the individual market, that is not the case now with brand-name insurers bailing out of the online state markets, although the many Americans with employer-based health coverage have been insulated from such changes.”

“In about one-third of U.S. counties, consumers in the individual markets don’t have a choice of plans.”

“It depends for whom you’re talking about,” said Larry Levitt, senior VP at the Kaiser Family Foundation. “For people with pre-existing conditions, choices are infinitely more abundant because they couldn’t get coverage at all. For someone who’s young and healthy there are likely fewer choices available now than before.”

Tom Toles Editorial Cartoon

On 1/16/17, Jordan Weissmann of Slate.com penned the following report, “Paul Ryan’s Big Lie About Obamacare:”

“To hear Ryan tell it, Congress needs to abolish the Affordable Care Act immediately because the law is in the midst of a “death spiral.” If you’ve been following the health reform wars of the past few years, this is a term you have almost certainly heard bandied about. It describes a worst-case scenario in which high premiums discourage healthy Americans from buying insurance, leaving behind a market full of sick, unprofitable customers whom carriers are still required to cover under Obamacare’s regulations. That drives premiums even higher, pushing away more healthy shoppers. The process repeats until insurers flee and the market unravels.”

“This was all completely baseless, at least if you judge by the latest enrollment data.”

During the early fall, there was some speculation that Obamacare might have entered the early stages of a death spiral. A handful of major carriers announced they were pulling out of the law’s insurance exchanges after losing too much money on them. (There were losses which were caused by the US congress failing to adequately fund “risk corridors” as promised within the ACA/ Affordable Care Act.) Many markets were left with just a single insurer. The government announced that average premiums were rising nationwide.”

 

“But we are now most of the way through open enrollment, and Obamacare sign-ups are rising. This is in fact the opposite of what’s supposed to occur in a death spiral. As of late December, a record 11.5 million Americans had enrolled in coverage on the marketplaces, up 286,000 from the same time a year before. Sign-ups even jumped in Arizona, where the insurance market seemed most imperiled thanks to its giant premium hikes.”

“There’s just no evidence I’m aware of that (Obamacare) is in mid-collapse. Perhaps Ryan has some secret info the rest of us aren’t privy to.

This blog was updated on 3/8/17.

10 comments

  1. Gronda, excellent post. The American Academy of Actuaries is there to represent financial sanity, so their opinion matters more than the Aetna CEO. Aetna exited markets because of the absence of getting paid for the additional risk. This lack of funding by Republicans in Congress was reneging on a commitment.

    Recall Aetna was going to merge with Humana, but did not as the DOJ said it would be too much of a monopoly. Humana will drop out of the ACA because in part because Congress reneged on paying them $591 million for adverse risk. People need to know the role Congress played in making premiums go up more than they should. And, this is addition to the constant naysaying that caused many of their party members not to consider or expand Medicaid in 19 states, which John Kasich said was a “no brainer.”

    The GOP dog has caught the car and does not know what to do with it. My strong advice as a retired actuary, benefits consultant and benefits manager, is make data informed decisions and fix the ACA. The platform is already built. Make it better. A key step would be for the 19 remaining GOP led states to expand Medicaid. The data reveals that the states who did have better rate of personal bankruptcy than before and hospitals have better account receivables.

    Again, great post and it is too bad the news sources that naysayers follows do not report like you do. You are far more credible than who the President gets his news from. Keith

    • Dear Keith,

      As always, thanks a million for all the added information.

      The republicans have taken on a no-win situation as they are now finding out. When they go to town hall meetings they are faced with a cross section of constituents who do not approve of their stance on Obamacare.

      I personally know hard line conservatives who were passionately v ACA until they had a relative who was greatly benefited by it.

      When republicans talk about those who hate Obamacare, it is my suspicion that they are talking mostly about businesses, heath-care taxes, etc..

      Ciao, Gronda

      • Gronda, I read the Koch Brothers and Heritage will fight Ryan’s plan. Unfortunately, they wanted it to go further. If Ryan wants to get something passed, he will need to swing more to the Democrats side. This is why Boehner predicted it won’t get repealed. Keith

  2. Reblogged this on It Is What It Is and commented:
    Why the rush? As per current times, just change the name … to Trumpcare or Ryancare …. ‘“Paul Ryan’s Big Lie About Obamacare: Congress needs to abolish the Affordable Care Act immediately because the law is in the midst of a “death spiral.” Not!!

    • Dear Horty,

      In these times, what does common sense have to do with anything. These legislators expect us to buy their baloney, hook, line and sinker..Well, good luck with that because it is not happening.

      Thanks a million for your support through all of this and for the reblog.

      Hugs, Gronda

  3. Since in both our Counties these people are elected by us based on what they say in the elections, wouldn’t it be nice if we had the power like any employer to sack them when they’re caught out in a lie.Maybe the threat of it would stop them trying to use false information to mislead us or treat us like idiots. Perhaps we’d get some honest politicians.They’re certainly needed while they’re pushing the latest fabricated figures for the ACA at people when a little help from the Republicans in the past could have made it something special.
    xxx Huge Hugs xxx

    • Dear David Prosser,

      To be able to boot the bums out is a great fantasy that works for me. There is some good sprouting out of all this mess. and that has to do with the huge numbers of peoples who are becoming more civic minded and are getting involved with politics at the ground level. I am talking about peoples who were never previously committed who are taking their current participation, seriously. Of course, this is making some legislators nervous which is as it should be.

      We are all tired of politicians who promise one thing, and then do not deliver.

      Ciao, Gronda

    • Dear 1EarthUnited,

      Thank you for the reference. I suspect that the former US House speaker knows what he is talking about based on hard earned experience.

      This is the part that I liked best:.

      “Earlier in the panel discussion, Boehner said he “started laughing” when Republicans started talking about moving lightning fast on repeal and then coming up with an alternative.”

      “In the 25 years that I served in the United States Congress, Republicans never, ever, one time agreed on what a health care proposal should look like. Not once,” Boehner said. “And all this happy talk that went on in November and December and January about repeal, repeal, repeal—yeah, we’ll do replace, replace—I started laughing, because if you pass repeal without replace, first, anything that happens is your fault. You broke it.”

      Ciao, Gronda

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