Did Dayton pick ‘winners, losers’ with his health care decision?

REUTERS/Brian Snyder
MIT economist Jonathan Gruber: “Some people are going to pay more, [such as healthy people who] benefited from existing discrimination in insurance markets.”

So, is Gov. Mark Dayton choosing winners and losers with his decision Monday not to implement President Obama’s administrative “fix”?

The answer, of course, depends to a large extent on the person asked.

Obama’s “fix” gave states the flexibility to allow those with substandard health insurance to keep their plans for a year, but Dayton opted not to take that route after hearing opposition from health plan providers.

Jonathan Gruber, an MIT economist who did modeling for MNsure, said there are some losers because of the new Affordable Care Act, but all the new people who will get coverage outweigh that distinction.

“There are some people who will be losers, but they’ll be vastly outnumbered by the winners,” Gruber said.

As Gruber has noted in the past, he said it’s important to look at the intent behind the new law. The goal, he said, was to pass fair insurance pricing so the sick and healthy pay the same thing for coverage.

“By definition, some people are going to pay more,” Gruber said, such as healthy people who “benefited from existing discrimination in insurance markets.”

“That’s not a bug — that’s a feature,” he said of healthy people paying more, and the transition from a “broken market” to a “fair market.”

Gruber also pointed out that people whose coverage changed under the new standards aren’t “pure losers” because they’re getting more benefits in return.

He acknowledged the situation of a 50-year-old man who doesn’t need maternity care but has to pay for it. But, Gruber added, perhaps that man might need mental health coverage in the future, which is also a new standard under the law. There has to be an essential set of benefits to end discrimination in the market, he said.

GOP Sen. Michelle Benson, a legislative health reform expert, said Republican fears are about the president’s health reform efforts are turning out to be true.

“I think long-term the losers are the people of Minnesota,” she said. “We knew people were going to lose their health insurance since the ACA was written.”

“All of the bad things we said were going to happen are happening,” she added.

Last week, Dayton praised President Barack Obama for putting forward an administrative “fix” that would allow people with substandard health insurance to keep their plans for a year.

But on Monday, after hearing concerns from Minnesota’s major health insurers, the governor reversed course and said the state wouldn’t implement the optional reprieve.

In agreeing that re-instating policies that no longer exist would be practically impossible for insurers, the governor said he also believes that the move would “likely cause more expensive health coverage for Minnesotans.” Dayton also praised the additional consumer safeguards the new coverage would provide.

Minnesotans would likely have to pay higher premiums if the fix went forward, the plans said, because it would skew risk in the market.

So, things are back to the way they were. Obama’s contentious announcement won’t affect Minnesota. But some Minnesotans will have to pay more anyway, and that was apparent from the beginning.

More than 140,000 Minnesotans recently were notified that their coverage was changing because of the higher standards of the Affordable Care Act, and the new standards would likely cost more.

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Comments (28)

  1. Submitted by Ray Schoch on 11/19/2013 - 11:26 am.

    The biggest Republican fear

    … is that — once people get past the still-considerable obstacle of a glitch-filled website — they will LIKE having better coverage, and millions of people who had no coverage at all under the previous situation — the one Republicans would like to maintain — will now have access to health care that they couldn’t afford, or couldn’t get at any price.

    It would be hard for Republicans to campaign on “We think health industry profits are more important than your family’s health.”

    On the other hand, if the website continues to be dysfunctional for very long, Republicans will — they already are — use it as a smokescreen to cover their complete and total lack of an alternative health care plan beyond “Let’s keep doing what we’ve been doing.” Instead, Republicans will focus on the alleged “incompetence” of the President in regard to the website, as if Barack Obama wrote the code and set up the servers personally. When that happens, it will be useful to point out that the website (and its glitches) was built by contractors. That is, it was built by the private sector.

    Obama should not escape criticism. I think Tom Brokaw’s statement on a Sunday morning talk show, quoted on Huffington Post, bears repeating: “…I would think, given the importance of Obamacare or the Affordable Care Act, eight months ago the president would have started every meeting with, ‘How we doing? Is that going to be ready? That’s going to be our big play for the second term,” and demanding from Kathy Sebelius and other people involved in it that they were ready and sending people over there to take a look at the rollout. That it suddenly landed the way that it did in utter chaos and it’s not going to be an easy fix is just inexplicable.”

    Maybe he DID ask the question, and responsible parties kept telling him everything was in order. Or maybe not. We’ll see how it all shakes out in a month or two. In the meantime, we can dismiss the usual Republican hysteria for what it is: objection to any Democratic program, simply because it’s a Democratic program. Keep in mind that the model for all this is Milt Romney’s Massachusetts plan, which seems to be quite successful in that state.

  2. Submitted by Diane Lindgren on 11/19/2013 - 11:28 am.

    News coverage of ACA

    From the media we hear numerous stories of those whose insurance is canceled and may pay more under ACA. It isn’t even often mentioned that these represent a small proportion of the population. There certainly aren’t the same number of stories on those who were unable to afford insurance or were denied coverage before ACA.

  3. Submitted by jody rooney on 11/19/2013 - 11:29 am.

    Let’s see

    a legislative health reform expert vs. an MIT economist. I wonder who got the numbers right.

    Did Senator Michelle also say how many peoples rates and deductibles dropped even with the new added benefits. Actually I am feeling pretty smug. Oh and my mom gets a break on her medicare supplemental coverages they dropped 30%.

    There are people who will pay more because they either paid for yuck coverage and people who pay less that is what spreading risk is all about.

    Frankly I am interested in a society that get’s healthier and stays healthy because in the long run that costs everyone less money.

    Of course you can have either the legislative reform expert of the MIT economist crunch the numbers for you.

  4. Submitted by Robert Moffitt on 11/19/2013 - 11:31 am.

    Government, by its nature, always picks winners & losers

    So nothing new here.

    Getting through the ACA won’t be pretty, and some will feel the sting of higher premiums, but if this thing works, health insurance in Minnesota will, on whole, be fairer and better than it is today.

    • Submitted by chuck holtman on 11/19/2013 - 04:51 pm.

      Precisely.

      The process of making decisions as a society creates “winners” and “losers,” to use those civics- degrading playground terms. I’m a “loser” in that narrow sense, but a “winner” in that the situation of those made worse-off by chance will be slightly improved and I’ll get a society slightly more aligned with my ideals of freedom and equal opportunity.

      What I found most interesting in this piece is Ms. Benson’s statement: “We knew people were going to lose their health insurance since the ACA was written.” This appears to be a confession of what has been clear all along – that Mr. Obama’s statement about “keeping one’s plan” was a simplification obvious to all reasonable people, and that “Obama lied” has been just another hysterical talking point to inflame the credulous (including the establishment media and plenty of pusillanimous Democratic leaders).

      • Submitted by Robert Moffitt on 11/20/2013 - 07:54 am.

        An oversimplified talking point…

        Some reporting I’ve heard (on MPR, of course) looked back to the President’s earlier speeches on the ACA, when he clarified that the people who could “keep their old plan” where largely those covered by group health coverage paid in part by their employers. Unfortunately, that distinction dropped out of the speeches as time when on. Still, the White House could have seen this storm coming, and should have done some pre-rollout damage control.

  5. Submitted by Dennis Tester on 11/19/2013 - 11:53 am.

    The ends justify the means

    “There are some people who will be losers, but they’ll be vastly outnumbered by the winners,” Gruber said.

    Winners and losers are a fact of life in a free society. But governments who openly designate people as such are known as totalitarian states.

    • Submitted by chuck holtman on 11/19/2013 - 05:07 pm.

      .

      You are saying that there are only two categories of human social organization – anarchy and totalitarianism – and nothing in between. You are saying your city council is totalitarian. Your state government is totalitarian. The federal government is totalitarian. The government of every nation is totalitarian. The Metropolitan Mosquito Control District is totalitarian.

      Remind me not to talk political philosophy with you. We’d get thru the first sip of beer and there’d be nothing left to talk about.

      • Submitted by Dennis Tester on 11/20/2013 - 07:53 am.

        When governments

        openly label the minority as losers, that is a government who rules through tyranny of the majority. You’d have to have spent some time in the minority to understand and appreciate that, I agree.

  6. Submitted by Hiram Foster on 11/19/2013 - 12:18 pm.

    Maternity care

    I have seen this one cropping up a lot lately. A basic observation, and some view it as a criticism, is that universal health insurance provides for an interdenominational transfer of wealth. Basically, young healthy people are required pay the costs of sick old people. Whatever the merits of this decision, it’s simply absurd for old people to complain that they have to pay the maternity costs of young people. That’s because the deal even including the requirement to pay maternity costs, works to the benefit of old people since the costs of old age care exceed the costs of maternity care. By arguing that they should not have to pay maternity benefits, old people are taking one of the few advantages young people have in that intergenerational transfer of wealth that is to the benefit of old people.

    If old people shouldn’t have to pay the maternity benefits of young people, why should young people have to pay for the far more costly medical care of old people?

  7. Submitted by John Ellenbecker on 11/19/2013 - 03:00 pm.

    Single payer is the answer

    Just more evidence that single payer is the answer. Put us all in the same pool with the same coverage – it will produce the most efficient system.

  8. Submitted by Joel Stegner on 11/19/2013 - 06:01 pm.

    Winners and losers

    What are the credentials of GOP Sen. Michelle Benson, legislative health reform expert? Her comments come directly from the Republican playbook and show no insight whatsoever about what is going in Minnesota.

    Ultimately, the biggest losers in this whole scenario are Republicans who said and did everything they could to undermine the Affordable Care Act. Frankly, they only care of their own insurance is preserved and have no concern whatsoever for the poor, those with preexisting conditions and others who are unable to get insurance in the current market. As they showed under Pawlenty, they took pleasure in removing people from what Pawlenty called the “welfare medicine” rolls.

    When hundreds of thousands Minnesotans and millions of additional Americans have insurance because of healthcare reform, they will be shown to have cried wolf again. They are showing just as much foresight as they did when they took the country to the brink of default.

  9. Submitted by Robert Gauthier on 11/19/2013 - 09:06 pm.

    Let’s get a grip here.

    The ACA was rolled out 45 days ago, not a single person is currently receiving ACA mandated insurance, as it starts next year, and the pace of sign ups is accelerating.
    Medicine fought Medicare for years aligning with the Republican party. Destroying it is still the goal of the Republican party and Tea Party. Most seniors seem to like Medicare, it seems. It has stabilized hospital budgets and provided care to the elderly, which was drastically poor and under covered prior to Medicare.

    ACA was designed to make everyone pay a fair share by getting insured, with real insurance. Most of the cheap policies were crap, when a real claim came up they did not cover and that left providers and hospitals holding the bag for the care. What you hear today is the “free” want to continue freeloading on the backs of the insured.

    If you go to North Dakota today, the oil industry workers are killing the hospitals up in the Bakken area, largely by not insuring or taking lousy policies, then getting really hurt- well explosions, burns, chemical exposure- ending up in the hospital and then skipping on the bills by leaving the state. That is what a “free” market solution to health care looks like- it leaves the hospitals to provide care for free. And those accidents happen very frequently up there. And it is killing the hospitals in Minot, Willston and the surrounding area.

    We already have widely accepted insurance mandates. If you drive, you are insured. IF you own a house and have a mortgage, you are insured.I do not see many people refusing to drive or own houses because they do not want to pay insurance. If we had widely mandated health insurance- 100% not 85-88% like we achieve with ACA, maybe we could start controlling costs by limiting cost shifting. We do it with a number of other situations, I don’t hear any outcry over car insurance costs rising, nor home insurance. No one likes it, but if they want to play, they have to pay. That is a “free market” solution.

    Not allowing sham insurance was a positive decision for people who play by the rules. The ones who do not are howling.

  10. Submitted by John Ellenbecker on 11/19/2013 - 11:17 pm.

    So you didn’t shop around

    Like most consumers of health care, you didn’t shop around to find the cheapest appendectomy. But then, neither would I. I would rather have the most competent appendectomy – the safest appendectomy – rather than the cheapest. When it comes to health care lets be honest – the answer to the high cost of medical care isn’t competition because our actions don’t support competition.

  11. Submitted by Todd Hintz on 11/20/2013 - 07:02 am.

    Universal Health Care

    Vermont implemented universal health care. I’m shocked that this isn’t national news, being trumpeted from all the major outlets.

    How soon can we get this implemented in Minnesota?

    http://www.minnpost.com/community-voices/2013/11/health-insurance-problems-keep-arising-vermont-offers-ray-hope

    • Submitted by Robert Gauthier on 11/20/2013 - 10:22 am.

      Might not work here

      Vermont is a small state with a relatively homogenous population. Their issue is poverty, rural poverty. We have a larger and more diverse state. However, if anyone can make it work, it would be Vermont. The state has a plucky, can do mentality. AND they do not have high end services in state, when I did my internship there was one cardiac program, only did kidney transplants on non-diabetics, limited large scale trauma hospitals. Lots of stuff got shipped out.

      • Submitted by Todd Hintz on 11/20/2013 - 01:15 pm.

        UHC

        Well, let’s just say that it SHOULD work here as it’s worked in areas of the world with much larger populations than Minnesota. The main ingredient needed is the willingness to pull together to make this project work. That seems to be the only element that Vermont has and we’re missing.

  12. Submitted by Pat McGee on 11/20/2013 - 08:21 am.

    It’s impossible to shop around

    You would have to know the exact number and type of providers for any a procedure. How it it is coded and what the negotiated rates your insurance provider has contracted for with each and every provider (including the facilities charges). And be able to evaluate the relative competence and complication rates for each provider. It’s impossible.

    • Submitted by Todd Hintz on 11/20/2013 - 10:35 am.

      Shopping around is also difficult, if not impossible, when you’re in an emergency situation. When you’ve been in a car accident they’re just going to take you to the nearest hospital. If you child is critically ill, you’re not going to delay treatment while you spend the next four days calling and emailing various providers to see what their price structure looks like.

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