The NYT handed a late Christmas gift to opponents of the Affordable Care Act when it published a profile on Harvard professors furious when the law they supported brought changes to their own health plans. The bone of contention among the faculty is the so-called “cost-sharing” measures adopted by the university. Administrators claim that certain features of the ACA—such as mandated minimum coverage and a new tax on generous plans—are making it more expensive to provide health care to their employees. They therefore are requiring the faculty to pay a higher percentage of their health care costs at the point of care, through deductibles and co-insurance fees. The professors are indignant and the experts are bemused:
“Harvard is a microcosm of what’s happening in health care in the country,” said David M. Cutler, a health economist at the university who was an adviser to President Obama’s 2008 campaign. But only up to a point: Professors at Harvard have until now generally avoided the higher expenses that other employers have been passing on to employees. That makes the outrage among the faculty remarkable, Mr. Cutler said, because “Harvard was and remains a very generous employer.” […]Meredith B. Rosenthal, a professor of health economics and policy at the Harvard School of Public Health, said she was puzzled by the outcry. “The changes in Harvard faculty benefits are parallel to changes that all Americans are seeing,” she said. “Indeed, they have come to our front door much later than to others.”
The humor here is obvious, reminiscent of the time Evelyn Waugh wrote about fellow novelist Nancy Mitford: “In 1945 Miss Mitford voted the Socialist ticket. Having done her best to make England uninhabitable, she went to France to live.” Having voted for policies that have raised costs across the country, these professors were at first isolated from the effects by living in the Ivy Tower—but their policies have now followed them even there.But there’s a much more significant point raised by this story. Employer-provided health insurance creates a number of distortions that have serious knock-on effects. One is that, as with generous insurance in general, people can seek care they don’t need. As the NYT piece mentions, one point of cost-sharing is to reduce overuse. Another is that people remain unaware of how much health care actually costs. Those costs come in the form of unseen lost wages and not subtractions from wages already given. A third is that it can create job lock for people who want to leave their job, but fear losing health benefits they can’t take with them.For all these reasons, and more, almost every health care scholar on either side of the aisle wants employer-provided health insurance to die—and one of the gripes liberal wonks have with the ACA is that it retrenches the employer system with the mandate instead of eliminating it. But the ACA does more than require employers of a certain size to provide health care. It also makes health care more expensive for some employers to provide. Those employers are responding with measures like Harvard’s that actually change the structure of employer-provided insurance, as wonks would say, for the better: more cost-sharing, for example.But most wonks didn’t anticipate things playing out exactly in this way, and it certainly wasn’t part of the marketing deck pitched to voters by the President and his team (“If you like the plan you have, you can keep it”). It’s probably this more than anything that’s causing the cognitive dissonance among Harvard’s esteemed employees, and it could be a sign of bigger trouble for the law if elites broadly start abandoning ship. If that comes to pass, however, keep your eyes peeled for the single payer option to make an appearance as a talking point. As we noted yesterday, that idea is likely to gain traction among burned ACA supporters whenever troubles with the existing law come to the surface.