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May 07, 2013 4:35 PM Health Cost Bottom Lines

By Ed Kilgore

Matt Yglesias makes a simple but very important point today about “health care costs” as understood by policy wonks and “health care costs” as understood by regular folk:

It’s easy to get confused about this because ordinary people seem to be very worried about the rising cost of health care. And wonks at the CBO also worry about health care cost growth. So when health care cost growth slows, shouldn’t people be happy? Nope. The cost people care about is the price that they personally pay. People care about premiums. People care about deductibles. People care about co-pays. What people do not care about is the underlying price trajectory of the service. Having the insurance company pick up 90 percent of the tab for a $1,000 procedure is way better than having the insurance company pick up 50 percent of the tab for a $500 procedure.

Why does this matter? Well, to the extent that conservatives tend to emphasize greater cost-sharing (a.k.a., “personal responsibility”) by consumers as a key strategy for health care cost containment generally, on the theory that over-utilization of health services is the basic problem, then they are running directly into the reality that “health care costs” for most Americans means how much it costs them. But it doesn’t just affect conservatives: if higher premiums, copays or deductibles coincide with the implementation of Obamacare, Obamacare is going to get the blame, no matter what’s going on under the surface:

Long story short, if Democrats stand up in a world of rising premiums and higher deductibles and say Obamacare is causing a slowdown in health care cost growth, people are going to look at them like they’re insane. Policy debates are one thing, but politicians who look at the clear blue sky and call it yellow are another.

There’s a lot of talk going on presently about the need to “educate” the public about Obamacare, which I agree with entirely. But it’s one thing to “educate” people about health care policies that don’t directly affect them, or that affect them positively if they take advantage of them. It’s another thing altogether to tell them that they should “rethink” policies that affect them negatively in the paychecks or their wallets. For the most part, they’re not going to believe it.

As Aretha would agree, health care policy is frustrating.

Ed Kilgore is a contributing writer to the Washington Monthly. He is managing editor for The Democratic Strategist and a senior fellow at the Progressive Policy Institute. Find him on Twitter: @ed_kilgore.

Comments

  • golack on May 07, 2013 4:54 PM:

    The chicago tribune recently had a op-ed on "Obamascare", where, indeed, they tried to scare people. Part of that drivel was the argument the premiums are going up, blame Obamacare, co-pays are going up, blame Obamacare, companies are cutting back on coverage, blame Obamacare...

    As though costs haven't been going up all along, as though benefits haven't been being cut all along, etc....

    And it was "headlined" by the bizaree Politico piece about somehow if Congressional staffers get to keep their health care benefit, then they are "exempting" themselves from Obamacare.

  • Peter C on May 07, 2013 4:59 PM:

    If health care costs increase more slowly, the federal budget picture in the future gets MUCH better. Sadly, this won't stop the fearmongering from Republicans.

  • c u n d gulag on May 07, 2013 5:15 PM:

    The "Benghazi! Benghazi!! BENGHAZI!!!" cries, will die down long before the shrieking about Obamacare.

    It's how Conservatives roll.

    They can make a negative out of any positive.

    I only wish we Liberals could make positives out of any negatives we find along the way.

  • exlibra on May 07, 2013 10:43 PM:

    As of July 1 (annual re-set date), my premiums will be $55 per month higher than they were last year. I don't like it (especially since I'm pretty healthy and, most years, only see my doctor for the annual physical) but, embarrassing truth to tell, I can afford it. And, with the Obamacare clamps on profiteering (80-85% of premiums has to be spent on actual healthcare providing, not on CEO pay; preexisting conditions excuse not allowed, etc), I figure someone who does need more care is gonna get it, instead of being screwed.

    So I'm philosophical about the raise. Even though, at the same time, they're cutting off Viagra coverage (I'm guessing that's what "Sexual Dysfunction drugs will no longer be covered under Anthem's prescription drug benefit" means). I never bothered to buy into those "increase your penis by 3 inches" ads (seems to me, a 3 inch penis is not worth paying for), so never had any need for drugs to get it up at attention, either.

  • paul on May 08, 2013 8:13 AM:

    A big part of this is also about shifting between different kinds of costs. If your premium goes down (or doesn't go up as much) but you have a higher copay, you might see that as a win or a loss, depending on who signs which checks. People in employer-paid plan whose copays go up, for example, don't see the premium numbers (and certainly won't get any savings back in the form of additional salary or wages.)

  • Bonaduce on May 08, 2013 8:42 AM:

    I follow John Boehner on twitter, mostly to troll, and he recently posted a link to an article saying Obamacare was causing premium increases next year. Upon reading the article (can't remember what publication) it ended with a statement to the effect of "the study is not sure how much, if any of the increase is due to Obamacare or to the ususal increases that happen anyways." Good thing conservatives actually read these articles so they won't be fooled by fear-mongering.......