> Yes, they are the same thing. Insurance is fundamentally a redistribution of risk with money being shifted from those who have not fallen victim to that risk to those who have. If you have a problem with that aspect of the ACA, you have a problem with the general idea of insurance.
No, they are not the same thing. The fact that a transfer of money happens is not a sufficient criterion for defining insurance.
Take two people with different risk profiles but who are both insured. If you can tell a priori which one is expected to have lifetime claims that exceed their lifetime premiums, then you don't have insurance - you have a wealth redistribution scheme[0].
Note that I didn't specify which person had the greater risk profile, or whether they both purchased the same "tier" of plan, or even whether they purchased their insurance from the same insurer. This property of insurance still holds even if the two people have completely different risk profiles, if one purchases a gold plan and the other a bronze, and if one person purchases from MegaInsurance in New York and the other purchases from AcmeInsurance in California - as long as they are both insured at risk-adjusted rates.
> You do realize that this is functionally the same as getting rid of the preexisting conditions protection, right? Whether someone pays tens of thousands to a doctor for care or to an insurance company for coverage are in practice exactly the same. The whole point is that many of us think that is a fundamentally unfair system to force someone to face in that situation.
First, nobody is paying tens of thousands of dollars to a doctor, because there's an out-of-pocket maximum cap. (And that cap could still exist under a risk-based pricing world.)
Second, it's not, functionally the same, because that doesn't mean that you can't separately provide income- or wealth-based subsidies if you're aiming to redistribute wealth. But that happens at a completely different layer from the risk underwriting - and because the underwriting process is allowed to properly account for a person's risk profile, you end up with lower aggregate premiums (pre-subsidy). Lower unsubsidized premiums means that you don't need to subsidize as much money in order to achieve the same sticker-price premiums that consumers see - in other words, the entire process is significantly cheaper for what appears to be the same result to the patient.
The reason we don't do this, even though it would be significantly cheaper, is because it's politically infeasible.
[0] Which, you may note, is currently the case - and that's because health insurance as it stands is a mishmash of two completely unrelated products ("insurance" and "wealth redistribution") that we happen to try to stuff into the same box.
We are talking in circles at this point. I guess we are going to need to agree to disagree on this. In summary, I think you and many of the ACA's opponents separate out many aspects of the program that aren't viable without other aspects of the law.
>The reason we don't do this, even though it would be significantly cheaper, is because it's politically infeasible.
I agree with your point here, but it is the whole perfect being the enemy of the good thing. Like the original article states, this system isn't perfect. Even Obama admits this. I do however believe the current system is unquestionably better than the system we had previously. I therefore think it is a bad idea to return to the previous system while we hope to eventually come up with a better one. It is not hyperbolic to say lives literally depend on it.
Probably more than anyone, Obama understands that politics is the art of the possible. The fact that the ACA was passed by a margin of one vote is some evidence that, in the face of raging blind opposition, they didn't leave anything on the table. If congress weren't in thrall to gerrymandered hyperpartisanism and effectively unlimited donor money, the law would have had at least some bipartisan support, been revised numerous times, had bad parts improved, good parts enhanced, and concerns of both parties and various constituencies addressed in light of the empirical evidence gathered over the last seven years. I don't think there will be a return to the previous system. Instead, for several million Americans, they'll try to demolish the first four floors of a building and disingenuously point to the doctor's office on the fifth.
First, nobody is paying tens of thousands of dollars to a doctor, because there's an out-of-pocket maximum cap.
If they have insurance. Without guaranteed issue they may not. With guaranteed issue they may have "access" to insurance but can't afford it, or the insurance they can afford may exclude the procedure they need. Retroactively. And even with insurance they may pay 25K a year in premiums plus that 10K max. Then 28K and 15K the next year... It's a system designed for optimal profit, not efficient (or moral) distribution of resources that every person will require. Debating whether it's insurance or insurance-like, or how the underwriting works, begs the question. Insurance companies should not be involved.
> If they have insurance. Without guaranteed issue they may not.
It sounds like you are trying to respond to a different sort of discussion altogether.
This whole subthread is in reference to the (implied) statement "requiring insurers to cover pre-existing conditions requires a mandate [and it will necessarily increase premiums to the extent that we have seen]"
Your responses is tangential to that, addressing either (a) what would happen if we didn't require insurers to cover pre-existing conditions, or (b) other potential failure modes which could potentially occur, and which already occur under the ACA.
No, they are not the same thing. The fact that a transfer of money happens is not a sufficient criterion for defining insurance.
Take two people with different risk profiles but who are both insured. If you can tell a priori which one is expected to have lifetime claims that exceed their lifetime premiums, then you don't have insurance - you have a wealth redistribution scheme[0].
Note that I didn't specify which person had the greater risk profile, or whether they both purchased the same "tier" of plan, or even whether they purchased their insurance from the same insurer. This property of insurance still holds even if the two people have completely different risk profiles, if one purchases a gold plan and the other a bronze, and if one person purchases from MegaInsurance in New York and the other purchases from AcmeInsurance in California - as long as they are both insured at risk-adjusted rates.
> You do realize that this is functionally the same as getting rid of the preexisting conditions protection, right? Whether someone pays tens of thousands to a doctor for care or to an insurance company for coverage are in practice exactly the same. The whole point is that many of us think that is a fundamentally unfair system to force someone to face in that situation.
First, nobody is paying tens of thousands of dollars to a doctor, because there's an out-of-pocket maximum cap. (And that cap could still exist under a risk-based pricing world.)
Second, it's not, functionally the same, because that doesn't mean that you can't separately provide income- or wealth-based subsidies if you're aiming to redistribute wealth. But that happens at a completely different layer from the risk underwriting - and because the underwriting process is allowed to properly account for a person's risk profile, you end up with lower aggregate premiums (pre-subsidy). Lower unsubsidized premiums means that you don't need to subsidize as much money in order to achieve the same sticker-price premiums that consumers see - in other words, the entire process is significantly cheaper for what appears to be the same result to the patient.
The reason we don't do this, even though it would be significantly cheaper, is because it's politically infeasible.
[0] Which, you may note, is currently the case - and that's because health insurance as it stands is a mishmash of two completely unrelated products ("insurance" and "wealth redistribution") that we happen to try to stuff into the same box.