Thursday, October 03, 2013

Why Obamacare is not like the Canadian system

Despite the partisan war in Washington that shut down the federal government this week, President Barack Obama has succeeded in implementing the first major health reform in the United States in nearly 50 years, as the Patient Protection and Affordable Care Act goes into effect. Even though its most virulent critics raise the spectre of “Canadian-style” health care, “Obamacare” does little to change the enduring differences between the two health care system. What, exactly, does “Obamacare” look like compared to Canada?

Not single-payer: Canadian critics tend to rail against “two-tiered” medicine, but in fact, the U.S. has a multi-tiered system. And despite the hype on both sides of the Congressional aisles, Obamacare keeps the same complex structure in place, while adding another layer through the introduction of health care “exchanges” for uninsured Americans. But the majority of Americans will continue to access care through a variety of health insurance plans made available or subsidized by their employer; nearly 50 million elderly and disabled through the federal Medicare program; another 60 million lowest-income through state-federal Medicaid arrangements.

Not universal coverage: Health care in Canada is based on a simple proposition: every legal resident is covered through a publicly-financed provincial or territorial plan. The individual mandate, derived from a Republican precedent in Massachusetts, stands in stark contrast to Canada’s universality principle. Even though Obamacare broadens coverage, the individual mandate relies on a fundamental insurance principle – care depends on type of coverage – and compels Americans to purchase insurance to access care. Americans now have more affordable insurance options and subsidies to cover their costs, and the lowest-income may be eligible for public coverage through the expansion of Medicaid. Still, despite the crush of online traffic as enrolment began Tuesday, only half of the estimated 40-plus million uninsured will be affected by Obamacare.
Read the rest here.
HT: T-19


The Anti-Gnostic said...

Can anybody say what Obamacare IS as opposed to what it ISN'T?

I heard it described on another blog as like the government making an $8,000 downpayment for you on a new Jaguar and proceeding to park it in your driveway.

I don't know whether that's hyperbole or not, because I don't know anyone, anywhere who can tell me what this 900 page law does.

John (Ad Orientem) said...

Obamacare is a mess. It's a disaster on wheels. It is an attempt to extend health care to everyone within a capitalist construct. Which of course means it continues to ration health care on the basis of ability to pay. And because of its idiotic expectation that each state would participate with the same goals, it has been vulnerable to sabotage at every turn.

The only thing it could be favorably compared to is the status quo ante. And that only barely.

The Anti-Gnostic said...

From what I have read, other countries provide 'universal' medical care via high deductibles. You will pay cash for many services, and your doctor is going to be a middle-class professional, not a 140 IQ'er making in the mid-six figures. Catastrophic coverage is socialized, because medical catastrophes are sufficiently rare to allow risk-spreading. There is no way to insure 'health.'

Americans pay $150/month for cable and squawk about $25 co-pays. We will do life-flights for heart attacks, two double-lung transplants in a row for a child with cystic fibrosis who probably won't live beyond age 30. "Bipolar disorder" is being diagnosed all over the place, mostly to women, who proceed to guzzle down $500 a month of prescription drugs.

If we want universal coverage, we've got to bend the cost curve down. That means making grown-up choices, which consumerist Americans are not willing to do.

Adam said...

The root of Obamacare is pretty simple: A set of carrots and sticks designed to make everyone chose to buy health insurance. (Along with that there were a few taxes/tweaks that meant it wouldn't massively raise CBO estimates of the deficit over some horizon).

The biggest carrots are the subsidies on exchange policies, removal of restrictions that prevented sick people from signing up, and simplification of plans into good/better/best policies (too much choice issues). The biggest sticks are the penalty for not having insurance and employer requirements.

It's a very complicated law, because the law is written with essentially a first order understanding of the likely unintended consequences of the major goals (thus the 50 employee requirement to provide insurance).

lannes said...

Now everyone can see why the insurance companies did not oppose Obamacare... more customers with Uncle Sam paying the freight.

John (Ad Orientem) said...

Actually the reason the insurance companies did not oppose Obamacare is that it saved them from an inflationary death spiral. They were losing customers every year because of the constantly rising rates. But insurance companies MUST have health customers in order to cover the costs of the sick ones. But with coverage rates soaring at many times the rate of CPI more and more people were unable to afford coverage and were dropping it.

This in turn forced insurance companies to further raise rates to pay for their sick ones. Which in turn pushed more people out of the insurance pool.. Repeat ad infinitum and you have an inflationary death spiral.

By mandating that everyone have insurance it broke the death spiral and saved the American medical insurance industry from near certain collapse within a decade or so.

But yeah, you won't hear that on FOX News.