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The real impact of the ACA rollout

November 19, 2013

Forget all the political spin or the frenzied rhetoric from opposing factions regarding the Affordable Care Act. Only  a newly-arrived Martian tourist would think  that this rollout has gone well.

What is truly sad about this is not the seemingly monumental incompetence of the rollout. It isn’t even the now patently obvious snake oil sales tactics.

What’s truly disturbing is that the real problem of the high cost of healthcare in the country have not been, will not, and were never intended to be addressed by the ACA.

It is unlikely that anyone has received a bill for any type of healthcare and not asked themselves “How in the hell could this possibly cost that much?”  Real people do file real bankruptcies because they simply can’t pay for the bill for their care.

There were and are many fixes to address not just the cost of insurance, but the cost of care.

The ACA relies on  people that are young, healthy and have a decent income to subsidize the care for the less healthy. That’s not a new strategy. That’s how it always worked, because that’s how insurance companies can offer payment of claims  in return for premiums. If the cost was tied to individual use of services, the young and healthy would pay less for their coverage, and the sick would pay more. People who had insurance but never used it, the insured who never ever exceeded the out-of-pocket limits, would get a good customer discount, not a 4, 5 or 15% rate increase every year. In fact, there used to be an avenue for people who were unhealthy to get insurance…it was called the high-risk pool. Now it seems everyone is in that pool.

The cost of healthcare is certainly not just about wages, equipment or even benefits. It doesn’t take $125.00 worth of those things to cover the cost of a cholesterol test. The overhead or indirect costs of providing healthcare cover a vast array of things ranging from patient expectations for the latest and greatest treatment or facility to litigation costs.

The insurance companies seem to have gone along with this law because they thought they were going to get more insurance customers. No one wanted to acknowledge that possibly the people that didn’t have insurance would just go into Medicaid straightaway, because the reason they didn’t have insurance was that they couldn’t afford it at any cost. No one thought ahead to see, or they just didn’t care that people might not want to pay for coverage they could never use. Did no one in the industry see that they might be out of business because of this law?

What’s really sad about the ACA is that it doesn’t provide a way to lower those costs. It doesn’t mandate across-state-lines shopping for the best insurance that fits individual needs. It doesn’t install common sense reviews or standards for malpractice claims to weed out the frivolous lawsuits. It doesn’t mandate that providers have to take the insurance payment as payment in full for services. It doesn’t create, but instead restricts, the ability for individuals to save money for routine medical care. Not since Prohibition has a law had so many built-in reasons to fail. It is hard to say which is worse – that it will be repealed, or that it won’t.

Most of all, it has greatly diminished the chances that those areas will be addressed in a commonsense and thoughtful manner in the future. If the ACA supporters do manage to turn this into a single payer system as they want to do, all competition will be gone. If they don’t succeed with that plan and the law is repealed or gutted to the point that it is essentially just an expanded Medicaid plan, it will be a long time, if ever, before the government gets involved in the healthcare question again.

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