Government subsidies under the Affordable Care Act work in mysterious ways: A Vanderbilt University researcher told The Washington Post over the weekend that his analysis of subsidies in the states where the federal government is running the exchanges shows huge anomalies.
“The feds will spend just about $10,000 subsidizing health insurance costs for a poor, middle-aged man who lives in Georgia – and just $3,000 buying the same guy in nearby Tennessee a near-identical plan,” Sarah Kliff wrote on Wonkblog.
“This is the weird world of financing the Affordable Care Act, where the prices that the insurers
charge for health care directly impact how much Obamacare will cost the federal government.
“John Graves, a researcher at Vanderbilt University, has spent some time toying around with data on premium rates across the country. The federal government has made this data accessible through the HealthCare.gov site. It will show you the premiums for a moderate level plan for each county in the 35 states where the federal government is running the marketplace.” Sarah Kliff, The cost of Obamacare varies wildly by state, The Washington Post, Oct. 13, 2013
The Affordable Care Act’s goal of extending coverage to as many Americans as possible is being achieved via Medicaid expansion, in states where that is going ahead, and also in the form of subsidies from the government. Those subsidies ultimately come from tax coffers. The tax coffers are filled by taxpayers.
in the run-up to the passage of the Affordable Care Act, we recall, the public option was taken off the table at the last possible second — the public option being the government equivalent of private insurance. The thought had been that a public option would reduce the size of premiums by offering a low-cost, government alternative to private-enterprise premiums and plans, meaning the private plans would need to drop premiums to compete. Senator Joe Lieberman withdrew his support for the public option, something he’d championed in the past, at the 11th hour.
Once the public option was removed, the bill passed — leaving subsidies as the only way to make insurance affordable, and insuring that public money be spent to pay for insurance policies, so insurers and providers could continue the status quo, at least for a bit longer.
The question arises, though: if public money were spent on a public option, wouldn’t that be less expensive? That was the original intent of those who supported it. Maybe it’s time to bring that public option back.