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January 27, 2014 at 08:30 AM
I am not proud of what happened.
A mere 10 days into the New Year I broke my first resolution. I have screamed at the TV and at several emails. Friends and colleagues are unsurprised by this, though they are surprised at the reason for and the target of my tirades. This time, my ire is directed at conservative and libertarian media outlets and their pundits.
I understand that cable outlets need to attract viewers and that organizations need to raise funds to further their political goals, but with all of the foibles of PPACA, there is a surfeit of suffering to spotlight. It began with an unfathomably dysfunctional multimillion-dollar website, progressed to millions of non-conformant — and ultimately cancelled — policies and has now reached whatever the opposite of enrollment critical mass is.
Carriers traded their underwriting tools for promises of massive, risk-diverse enrollments like Jack trading the cow for a handful of magic beans. Faced with today’s realities and with significant rating restrictions, they are going to have a choice: raise prices or cease to exist. If things don’t turn around, it is going to be very, very ugly indeed.
PPACA includes three mechanisms intended to offset pricing and claims anomalies. One tool is risk adjustment, which Bloomberg Businessweek described as “Robin Hood style redistribution” from carriers who had to pay out less in medical claims in a given year to those carriers who had to pay out more. Additionally, PPACA includes a reinsurance fund to help mitigate high-dollar claims.
Perhaps the pundit class has simply grown tired of discussing those facts, sad as they may be. Yet political expediency seems to have overtaken any reasonable arguments or discussions. Regardless, I just could not listen to one more commentator or Senator from Florida referring to the third PPACA cost mitigation component as “bailouts” for the insurance companies.
