Death Spiral or market share race? We know that the ACA isn't in a Death Spiral, so what about those naysayers? What do insurers want? What next?
Esther Ferington wrote about Deadline Creep (the various extensions to Open Enrollment) at ACA Signups yesterday, and I asked her permission to repost it in full here.
We've been watching deadline creep for at least a month now. And I think it's kind of a big deal.
But not in the way that the naysayers predict, where not having firm deadlines on Open Enrollment means that people will only buy insurance when they get sick, thus driving insurance rates up and participation down into a Death Spiral. The Death Spiral has always been Tea Party nonsense. For example,
Ezra Klein, Washington Post, Jan. 14: The death of Obamacare’s death spiral
I provide more below on what turns out to be the Republican Party's Death Spiral over Obamacare.
Also, an excellent and long-awaited number from brainwrap's home state: Michigan: ACA Medicaid expansion up to 159K in first 4 weeks!
Now, if we can just convince the poor that Republicans have been lying about Obamacare requiring them to get chip implants…
What Is All This "Deadline Creep" Really Telling Us?
guest post by Esther Ferington
Recently, I've been puzzling over a question: what is all this "deadline creep" really telling us? Not just about the considerable burden it's placed on Charles Gaba in continuing this website, which is obviously no joke—but also about what's happening as the ACA rolls out. We've been watching deadline creep for at least a month now. And I think it's kind of a big deal.
I'm using "deadline creep" to include not just redefining what "March 31" means (apparently, in some states, it means the end of May!)—but also proposals for the next open enrollment to last through income-tax season (here's one example from Families USA: look for idea 3), Nevada's law that requires any off-exchange enrollment to be open year round and so on. In general, "deadline creep" is anything that tends to loosen up enrollment restrictions and strict deadlines.
That means we're looking at a paradox. On the one hand, it's truly, absolutely essential to have a restricted open enrollment period with a definite end date. Otherwise, some people will wait to sign up until they get sick, reducing healthy signups and increasing big claims—that's Insurance 101. And yet... deadline creep has been getting close to zero public pushback or resistance from the insurers, the politicians, and even the exchange admins, who have had to spend money on staff and other resources well past March 31. If anything, people seem to be egging it on. How can that be?
I think the explanation is that this is not a stable, mature insurance market, like the ones that health-care analysts are used to. Instead—now that it's working—it's a multi-year gold rush of tens of millions of new customers, with market share for individual companies perhaps set for life in the process. And that makes everything different.
Insurance companies now have conflicting incentives: sure, they still need some way to keep people from waiting to sign up til they're at the ER—but they must also want to fling their doors wide open in the friendliest way to as many new customers as possible, before the flood dries up in three or four years. If you have the most popular smartphone of the moment, your biggest concern is to keep it in stock, and much mentioned in the news, and let the excitement build and never stop—not to focus too hard on observing your stores' closing times.
Politicians, of course, are generally in favor of maximum choice for constituents / voters and never like putting restrictions or limits on them. So any tweak or change that would provide more openness and new enrollment options, even on the margins, would be a plus for them. For anti-ACA people, this works just as well. Any increases in individual flexibility that they support are good examples of how the ACA is just terrible, but at least they support "fixing" it in that way.
I realize that much of this vast market expansion, which is only just getting started, was understood in advance—that's why insurers went along with the ACA. But the experience of building up to those March 31 (ish) enrollment spikes, especially after the fiasco of October and November, must have felt quite different than all the old, speculative internal spreadsheets, filled with caveats and estimates, in the run-up to the exchanges. And it's those accelerating enrollments that I think explain not only short-term, but longer term, deadline creep.
One result might be, for example, that open enrollment for next year could ultimately surprise us by running fairly long—perhaps even through April 15. The number and type of special enrollments in the "off season" could expand over the next few years, by law or regulation. Maybe there will be more off-exchange ACA options year-round in some other states, too, as in Nevada.
In other words, as the rush continues for the next few years, I'd say that any change that tends to open the doors wider to new customers is going to have more push behind it than we might have expected, and less (if any) opposition. The underlying reasons for signup schedule limitations are still there, but the very existence of "deadline creep" tells us that the balance point between strict deadlines and greater flexibility is farther toward the flexible side than we expected. (I told you I'd answer my starting question eventually!) And that seems like a welcome development to me.
Thanks, Esther. I welcome it too.—Mokurai
Republicans are in Their Own Death Spiral
As long as the Republicans, particularly the Tea Party wing, cling to their fantasies of repealing Obamacare, and to the ACA being a train wreck, Obama's Waterloo, in a Death Spiral, destroying the economy and freedom by, you know, actually helping people, and as long as the ACA goes from success to success (even if we have other major glitches along the way, particularly Republican obstruction), Republican candidates are going to fail to pick off vulnerable Democrats, and are going to become increasingly vulnerable themselves. This can only add to the demographic pressures they are already under, which promise to tip the country within the next decade anyway.
The case is similar on the minimum wage and immigration, except that those haven't happened yet. Also on women's issues, union-busting, and voter suppression, where Republicans are doing some of the best Democratic GOTV work in ages.
This isn't actually news any more. We know it, but denialist Teapublicans never will. It is other Republican factions, notably the Chamber of Commerce/1% group and those with national political ambitions, that are beginning to see that the ACA is good for business and for state budgets, and that repeal is now a political liability.
The top hits on Google for Obamacare death spiral are all but one from months ago. This issue is dead. It is no more. It's expired and gone to meet its maker. And no, it is not pining for the fjords. It is a late issue. It's a stiff. It's rung down the curtain and joined the choir invisible. This is an ex-issue.
What a great year for the Pythons. I lived in England that year. Doctor Who, too, with the third and fourth Doctors and Jo Grant. And The Two Ronnies.
Ronnie 1: And now it's good night from me.
Ronnie 2: And it's good night from him.
Ahem. Yes. Sorry, Death Spiral. Carry on.
The New Republic, JANUARY 29, 2014: Rumors of Obamacare's Death (Spiral) Are Greatly Exaggerated
Forbes, Feb. 12: Sorry, Conservatives: Based On The Latest Sign-Up Figures, There Won't Be An Obamacare Death Spiral
The Atlantic, Jan. 5: 5 Reasons to Not Freak Out About an Obamacare Death Spiral
Of course, we used to have our unskewers. First, the usual naysayers, in January and Fedruary. Notice that they have since given up.
The Daily Caller, Jan. 13: Obamacare death spiral is underway, says study
They don't actually cite a study.
Obamacare’s secret numbers are leaking out, and they’re looking very red.
The New American, Jan. 22:
Is an ObamaCare “Death Spiral” on the Horizon?
CNS News, Jan. 17: Obamacare At ‘Significant’ Risk of ‘Death Spiral,’ Economist Warns
CNSNews.com was launched on June 16, 1998 as a news source for individuals, news organizations and broadcasters who put a higher premium on balance than spin and seek news that’s ignored or under-reported as a result of media bias by omission.
Study after study by the Media Research Center, the parent organization of CNSNews.com, clearly demonstrate a liberal bias in many news outlets – bias by commission and bias by omission – that results in a frequent double-standard in editorial decisions on what constitutes "news."
In response to these shortcomings, MRC Chairman L. Brent Bozell III founded CNSNews.com in an effort to provide an alternative news source that would cover stories that are subject to the bias of omission and report on other news subject to bias by commission.
The Hoover Institution, Nov. 2013:
Obamacare’s Death Spiral
Striking the law down will be an act of mercy for the American people.
We cannot, of course, pass by the hapless Bill Kristol's hapless crew, unskewing Ezra Klein.
The Weekly Standard, Jan. 16: The Obamacare Death Spiral Isn't Dead
But as I said, all of that is over in the regular Right wing outlets. For my last exhibit, here are the pitiful few hard-core unskewers who are still at it, like the ones continuing to unskew the 2012 polls after Romney lost because Voter Fraud!
ACA Death Spiral, April 17: CBO implies Obama regulation shoveled $8 billion to insurers
First, the claim in the body of the article is that the Risk Corridors in the ACA, a form of reinsurance, will cost $8 billion extra. So it is not that any money was handed out.
Second, that isn't what the CBO said. The Risk Corridors are now projected to cost nothing in the future, instead of making an $8 billion profit for the government.
Third, therefore no death spiral. The real story is that there is no risk that health insurers will have to make excessive payouts for care of the particularly sick, and have to ask for help above the level they pay reinsurance premiums for, and then raise premiums on the public. You know, like they used to do every year before the ACA.