New reporting by AP underscores systemic problems with healthcare system based on for-profit insurance model

- Jon Queally, staff writer

As the political uproar surrounding the Affordable Care Act has played out over recent months, one single fact remains: the private insurance model—on which the law widely known as Obamacare is based—is more complicated, more expensive, and provides less coverage than a simple, “everybody in/nobody out,” single-payer model that almost every other advanced country in the world enjoys.

And even within the debate about whether or not Obamacare is a “step forward” or a “step back” for healthcare delivery in the U.S., what’s become increasingly clear—as was predicted by progressive critics of the Obamacare model—is that though portions of the law undoubtedly improve the kinds of coverage that some people receive, others are still excluded from the system entirely and among those who are now purchasing insurance for the first time in their lives many will face “sticker shock” at the high premiums or out-sized deductibles.

As new reporting by the Associated Press highlights:

As a key enrollment deadline hits Monday, many people without health insurance have been sizing up policies on the new government health care marketplace and making what seems like a logical choice: They’re picking the cheapest one.

Increasingly, experts in health insurance are becoming concerned that many of these first-time buyers will be in for a shock when they get medical care next year and discover they’re on the hook for most of the initial cost.

The prospect of sticker shock after Jan. 1, when those who sign up for policies now can begin getting coverage, is seen as a looming problem for a new national system that has been plagued by trouble since the new marketplaces went online in the states in October.

What the AP goes on to describe is how the economic hardships that most middle- and low-income Americans experience on a daily basis compel them to choose insurance policies with the lowest monthly premium, but don’t realize that the huge deductibles attached to those plans mean that they may have huge medical bills to pay before their coverage kicks in.

In addition, because the state-level exchanges from which participants in Obamacare must purchase their plans are so complicated, many consumers—especially those with little experience navigating the private insurance marketplace—won’t possess the technical or financial savvy to calculate the best plan for themselves or their family.

“I am so deeply clueless about all of this,” said 29-year-old Adrienne Matzen, an actor in Chicago, told the AP. She’s been  mostly without insurance since she turned 21, but must now figure out how to receive coverage she can afford while living with two chronic illnesses and earning less than $20,000 a year.

Someone like Matzen—who ultimately may or may not be individually better off under the ACA—exemplifies why the overall system is still so far from the ideal that progressive critics of Obamacare say is possible.  The choices available to her  depend on the state she lives in, her ability to navigate the choices, and a host of other complex factors.

As the AP reports: “The complexities of insurance are eye-glazing even for those who have it. Only 14 percent of American adults with insurance understand deductibles, according to one recent study.”

On the other hand, a single-payer or Medicare-For-All approach, according to its proponents, would cut out both the complexity and an enormous part of the expense that has historically plagued private insurance industry and will remain under Obamacare.

This summer, Gerald Friedman, a professor of economics at the UMass Amherst, released a study showing that a single-payer system like the one described in Rep. John Conyers’ HR 676 could save as much as $592 billion a year in U.S. healthcare costs.

According to his fiscal assessment, those savings would be more than enough to cover all 44 million people the government estimates will be uninsured in the coming year while also improving the existing coverage for everyone else. “Paradoxically, by expanding Medicare to everyone we’d end up saving billions of dollars annually,” Friedman said of his findings. “We’d be safeguarding Medicare’s fiscal integrity while enhancing the nation’s health for the long term.”

And as Dr. Steffie Woolhandler, a spokeswoman for Physicians for a National Health Program, recently explained on Democracy Now!:

[Single payer/Medicare for all] means you would get a card the day you’re born, and you’d keep it your entire life. It would entitle you to medical care, all needed medical care, without co-payments, without deductibles. And because it’s such a simple system, like Social Security, there would be very low administrative expenses. We would save about $400 billion, which would allow us to afford the system. I mean, I just want to remind you that when Medicare was rolled out in 1966, it was rolled out in six months using index cards. So if you have a simple system, you do not have to have all this expense and all this complexity and work.

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