Honest Wonkerry for Ezra

A health industry expert on ‘the fundamental problem with Obamacare’: Kline's interview with Bob Laszewski paints a grim picture for Obamacare, in spite of Kline's support for the president and his signature initiative. Here is Laszewski's assessment of the all important problem of avoiding adverse selection:

It’s not positive. I don’t want to say people have given up on the notion they’ll get a good mix. They know the administration will make a big push. The insurance companies will spend big on advertising and outreach. So no one has given up. But it doesn’t look good right now.

There’s a big misconception that this is about young people. That’s baloney. It’s about healthy people. A healthy 20-year-old might only pay a $100 premium. You want healthy 40 and 50-year-olds. The big problem right now is really total enrollment. We only have about 10 percent of the uninsured in here. Insurers think you need more like 70 percent of a pool of people to sign up.

Laszewski ends with an analysis of the fundamental short coming that could have come from Adam Smith:

If an entrepreneur had crafted Obamacare he would’ve gone to a middle class family. A family of four make $54,000 a year has to pay $400 in premiums net of subsidy and for that the standard silver plan has an average deductible around $2,500 and a narrow network. They’re going to pay almost $5,000 for that?

So the entrepreneur would say I’ve got $5,000 in premium and all this deductible, what do they want for that? And they probably would’ve said we want office visits and lab tests because the kids need to go in occasionally and then we want catastrophic care. The problem with Obamacare is it’s product driven and not market driven. They didn’t ask the customer what they wanted. And I think that’s the fundamental problem with Obamacare. It meets the needs of very poor people because you’re giving them health insurance for free. But it doesn’t really meet the needs of healthy people and middle-class people.

Too bad more of those greedy, evil businessmen who are only out for a profit had not been involved in putting this thing together.