ObamaCare Clusterfuck: Jon Walker discovers that rentiers charge rent
[T]his working paper from Mark Duggan, Amanda Starc, Boris Vabson is about Medicare Advantage I think its provides some insight into the core problem with the entire design of the Affordable Care Act’s coverage expansion. It looks at what was the result off the government overpaying for seniors in Medicare Advantage, which is an exchange where seniors shop for subsidized private insurance. From the summary:
Our results demonstrate that the additional reimbursement leads more private firms to enter this market and to an increase in the share of Medicare recipients enrolled in [Medicare Advantage] plans. Our findings also reveal that only about one-fifth of the additional reimbursement is passed through to consumers in the form of better coverage. A somewhat larger share accrues to private insurers in the form of higher profits and we find suggestive evidence of a large impact on advertising expenditures.
If you spend a lot of money on a Rube Goldberg [hat tip, DCBlogger] system with middle middlemen some benefits will trickle down to regular people but huge amounts of money will be eaten up in profits and waste.
I don’t doubt the Affordable Care Act will actually help some people, but at an exorbitantly inflated price because of how inherently wasteful the design is. This creates a needless burden for all taxpayers and premium payers on the exchanges.
If only we had known this when ObamaCare was being passed!
If only there were a model -- perhaps on our very own continent, and even, although this is almost too much to ask, in a political economy very much like our own -- that we could go look at, and see how this "inherent waste" and these "needless burdens" could be avoided!
NOTE I'm being unkind to Walker, I know, but I can just feel another public option magic sparkle pony about to come stumbling down the pike because markets.