Insurers that corner the market of healthy individuals have an unfair advantage over insurers that cover a greater number of high cost, sicker patients. To protect those insurers with high costs from failing in the markets, risk adjustment corrects for the market distortions by taking funds from the insurers with low cost patients and transferring them to the insurers with high cost patients.

Never have we received as many requests to comment on an article as we have on Rick Ungar’s “The Bomb Buried in Obamacare…” He is to be highly commended for his enthusiastic support of single payer, but his analysis that the insurers’ requirement to comply with the statutory medical loss ratios is an Obamacare bomb that will cause so much damage that we’ll be on an inescapable path to single payer might represent… well, perhaps a touch of hyperbole, intended or not.

Those of us who have great admiration for Paul Starr were disappointed by his recommendation to require anyone who opted out of coverage to be prohibited from having coverage for the next five years.

This brief article from In These Times, available at the link above, explains how the Affordable Care Act is bringing us a new national standard of “unaffordable under-insurance.” It’s not simply that we can do better, we have to do better.

One of the more important tools to enable the transfer wealth up the income ladder is to shift from defined benefit programs to defined contributions. With a defined contribution, a set dollar amount is contributed to the program regardless of what the future benefits may cost, whereas with a defined benefit program, the projected costs of the program must be fully funded so the benefits will always be there when needed.

More people receive their health insurance through their work than from any other source. The costs of employer-sponsored plans have been skyrocketing, as demonstrated by the increase in premiums. The coverage has eroded, as demonstrated by the increase in deductibles. The Office of the Actuary has predicted that “private insurance spending per person will increase faster than public programs over the next decade.” Yet the Affordable Care Act failed to provide measures which would have any significant impact on these trends in employer-sponsored plans.

Michael Dukakis certainly recognizes accountable care organizations as being merely a new variant of HMOs with capitation. He worries about us “futzing around” with ACOS, but we need to go him one better. Let’s quit “futzing around” with private insurers and establish an improved Medicare for everyone.

The PROMETHEUS Bundled Payment Experiment held the promise of improving the quality of care while controlling costs simply by bundling together services of multiple health care providers into a single package covering a specific acute or chronic disorder. After three years of implementation, the payers and providers have not been able to make bundled payments or execute new payment contracts. The experiment is an abject failure.

Section 1331 of the Patient Protection and Affordable Care Act (ACA) authorizes states to establish “basic health programs” to cover individuals with incomes between 133% and 200% of the federal poverty level, who are not otherwise eligible for Medicaid. The primary thrust of ACA is to cover many of the currently uninsured by expanding Medicaid and by establishing new state health exchanges offering private health plans. This NEJM article evaluates whether adding a third option – a basic health program – would improve stability and continuity of coverage for this low-income sector.

Instead of administered pricing, our government depends more heavily on the market for the pricing of our health care when payments are made through private insurers. Only the magic of the marketplace can price a $100 vial of antivenin at $12,000! Obviously we do not have nor ever will have a functioning free market in health care. It’s time to abandon this myth and move on with an effective method of controlling costs through fair pricing – a single payer national health program.