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The ACA fixes no one wants to hear.

March 9, 2017

Yesterday, Musings commented on how President Trump might be able to get the AHCA through Congress.

Today, the flip side. What if the Freedom Caucus is right?

As noted previously, Conservatives question whether we need a Federally-run national universal health insurance plan in the first place.

They aren’t the only ones asking.

It is obvious it doesn’t make health insurance, much less actual healthcare, cheaper or better. If you doubt that, look at the two massive national healthcare systems we already have, the VA and the CMS twin programs of Medicare and Medicaid.

It is also not all-inclusive. Prior to Obamacare, there were approximately 30 million people uninsured. After Obamacare there were still about 30 million people uninsured.

Few people can argue that these aren’t the people that most need access to healthcare that won’t bankrupt them.

So why not cover them and let the rest of the marketplace function financially  essentially the same way  it did before Obamacare?

Would taking over the nation’s sickest and poorest relieve the pressure on insurers to sock it to everyone else?

In essence that’s what the AHCA’s age-weighted premium increase does, but it leaves the discretion to the insurance companies. Plausible deniability, perhaps?  It wasn’t Congress, it was the mean old insurance companies?

Whatever the logic, it was an instant “No Sale” to the over-50 generation already looking at decreasing earning power and increasing medical costs as they age.

How then do you pay for all this largesse?

Hang in here folks, because this is where it gets complicated. Who knew?

Insuring the most vulnerable is going to require some sort of Federal subsidy, no matter what name you give it.

Prior to the ACA most people were getting insurance through their employers, or buying it through the individual private market.

And whether politicians like it or not, it was working almost exactly the same as the AHCA is predicted to do today.

If you could afford it you bought the best insurance you could find, and if not, you scaled back on benefits and co-pays until you got something that might at least pay for that once-in-a-lifetime illness or injury.

The AHCA, just like the ACA, removes that option. It still appears to force one-size-fits-all policies on everyone, although Paul Ryan denies that.

The sickest people run up the bill for the healthiest people. Old people cost more to cover than young healthy people, just like the repair costs for a new car are less than for a ten-year old model.

Pre-Obamacare,  everyone’s premiums went up every year, since the cost was spread over the entire population. Under the AHCA it seems that premiums become sort of a use tax. The more you use it (as an age group) the more you pay for it.

Critics of that reasoning point out that women of childbearing age also use a lot of medical care, with one website reporting costs for a normal uncomplicated delivery in California varying from $3,296 to $37,227. Yet, they are not charged accordingly.

If you can take the most expensive care costs out of the equation, premiums have no incentive or justification to rise more than inflation.

Such information as has been revealed on the “replace” part of the ACA equation seems to indicate that the GOP’s commitment to having any tax changes paid for by corresponding cuts in other programs could well derail the President’s strategy up to this point.

The GOP faction wants to take Medicaid out of the picture completely as a Federal budget line item, a huge shot in the arm for Democrats, despite previous administration denials that any entitlement cuts are on the table.

However,  while “giving” the Medicaid money back to the states, Washington still controls it, via such requirements as requiring states to withhold payments to women’s clinics, abortion providers and oh yes, lottery winners. If they would just stop collecting it in the first place and let the states control both the source and the payments that would at least make some sense.

Not only are well over half of current Obamacare enrollees (reportedly 11 million people) actually covered solely by Medicaid, but it also covers a large number of retired and low-income people, and administers the CHIP (Children’s Health Insurance Program) program as well.

Figures available for November 2016 show that almost 71 million people, or nearly 22% of us, receive at least some portion of our medical needs through Medicaid.

Dumping that expense all on the states, even with block grants, is going to seriously upset the apple cart.

Defunding Medicaid at the Federal level to pay for the complicated system of tax credits wouldn’t seem to be much of an answer to that.

Likewise the Jim Jordan-backed bill relies heavily on HSA’s, using the reasoning that if you are spending your own money, you are going to call around and get the best price. And that’s assuming you make enough money to fund an HSA.

Good luck with that.

When reality meets theory

Take it from someone who has done the cost research …it doesn’t produce a whole lot of clarity. Look at the wide range of costs reported for delivery of a child quoted above.

Even the providers themselves often don’t have a clue as to what it really costs to deliver a complete healthcare solution.

Doctors have no idea what the lab charges are, or the what the anesthesiologist charges, or what charges are not covered by the basic room rate, or what an ibuprofen tablet costs in a hospital or how much to allow for a surgical tray.

At best you have to make a half dozen calls, and the chances right now are pretty good you won’t even get someone to make an educated guess. At worst, you get someone on the other end who tells you that the information is either not available or that there are too many variables to give an accurate estimate.

Websites that claim to give you charges for your local area are simply a joke. Typically, what they give you is either what insurances will pay,  or a huge range, not actual costs.

Add to that the fact that the average Joe or Jane doesn’t even know what questions to ask, and the “informed consumer” becomes the completely befuddled consumer.

Forcing every medical facility and doctor’s office to periodically provide the information would weave a whole new web of unworkable regulations.

This is another one of those feel-good solutions that can’t stand the test of real-world application.

In short, Obamacare is and may remain unexploded ordnance for Republicans for many years to come.

The President needs to craft a win. It’s unlikely the AHCA will provide it, even after Part Three.

The other fix

Now for the fix no one wants to hear. To get costs in line with the available money, at some point someone is going to propose national price controls.

The only way to do that without taking on a true national healthcare system is to both cap the charges and take the sick people completely out of the pool for insurers. So much for letting the marketplace decide.

That would leave a semblance of an open marketplace for the for-profit companies, and still guarantee at least some exposure to actual care for everyone else.

That’s actually what the AHCA proposes when it allows insurers to charge premiums of up to five times as much for the older people most at risk of costing a lot of money to treat.

Of course the alternative is just to repeal the ACA, and let things go back to the way they were.

Even if the Freedom Caucus is right, the chances of that happening are even worse than getting them on board with the AHCA.

Can you imagine what happens when you take candy from a baby, times tens of millions of  people?

From → op-ed

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