Should’ve Called it the Accessible Care Act
You would think, with a name like the Affordable Care Act (ACA), the law would be sharply focused on reducing healthcare costs. And yet in the original 2,000 plus page bill, it is sparsely mentioned. Instead the legislation aims its attention at accessibility to health insurance. It does this in a few ways, for example:
- Expansion of Medicaid – US citizens at or below 138% of the Federal Poverty Level are eligible for free health insurance.
- Elimination of Medical Underwriting – Health insurers cannot deny individuals coverage based on their medical history or conditions.
Good, bad or indifferent, these two pillars of Obamacare have nothing to do with healthcare costs. But instead they’re focused on… you guessed it, accessibility to health insurance. To be fair though, the ACA has two provisions that, at least on the surface, are geared towards healthcare costs. Let’s take a look at them both.
Obamacare’s Cost Control Measures (not really)
First, some people believe that the ACA made insurance less expensive, through subsidies. What’s a subsidy? Simply put, a subsidy is the amount of money the government pays toward your health insurance premium. And if you happened to qualify for one, you’re probably paying far less than you used to for medical coverage. However, this doesn’t actually reduce the cost of health insurance! The government is just picking up the lion’s share of the tab to make it appear affordable. The premiums themselves are just as high, actually higher, than they were before the ACA.
Insurance companies are mean, faceless and worst of all, greedy. So it’s no surprise that one of the most popular provisions of Obamacare is its Medical Loss Ratio. In short, it requires health insurers to spend 80-85% of the premiums they receive towards their policyholder’s healthcare expenses. As opposed to advertising or big bonuses for their CEOs. And what happens if they don’t reach these levels? They must pay the premiums back to their policyholders. Surely this would solve America’s health care spending crises, except that it didn’t. As it turns out, the majority of health insurers were already doing this. In fact, the most recent report from CMS shows that in Pennsylvania’s small group market, all health insurers were at or above these standards. But if the greedy health insurance companies aren’t causing the high insurance prices, then who’s to blame?
The real problem
“Repeal ObamaCare, replace ObamaCare, amend ObamaCare and all of the plans are based on the false ideas that we have an insurance problem in the United States, when what we really have … is a health care billing problem, a medical price problem”
So it turns out that the reason health insurance is so expensive is, wait for it… the high cost of medical care! The above quote was taken from Tucker Carlson’s interview with Steven I. Weissman. He is a healthcare industry insider and former Florida hospital president. Weissman stresses the need for more transparency in medical pricing. He thinks it will lead to competition amongst medical providers and eventually lower prices. Don’t believe him? Check out the following example from RealClearHealth.
Keith Smith’s Surgery Center of Oklahoma (SCO) has a website where you can view their price for a variety of surgical procedures. A patient, from Georgia, stumbled onto their site. He quickly looked up the surgery that he needed and checked the price. Including anesthesia, his total cost at SCO would be $3,600. His local hospital in Georgia was going to charge him $40,000! So, he told his local hospital that he was going to have the procedure done at SCO, due to the huge cost difference. And guess what, the local Georgia hospital dropped their fee by 90%, to $4,000, and happily performed his surgery.
Why this is still a problem, and will be for a while
If the solution to our great healthcare crisis is medical pricing transparency, why didn’t the Affordable Care Act address it? Why don’t any of the Obamacare replacement proposals talk about it? This is where it gets a little.. slimy. Weismann touched on this in the interview. He said “the health care industry spends more on lobbying than the oil and gas industries, defense industries and aerospace industries combined”. And, according to this excellent article from the Patriot Post, he is spot on. The total amount of money spent on lobbying for defense, aerospace, and oil/gas combined is $317 million. And healthcare lobbying… an amazing $509.5 million.
So it’s no wonder that our elected representatives aren’t talking about this simple, practical solution. Afterall if medical prices were transparent it would be much harder for the large hospital and doctor groups to charge exorbitant prices, which are sometimes four or five times higher than their competitors. But since these are the very organizations stuffing the democrats’ and republicans’ re-election coffers, it would not be in their self-interest to change the status quo. And while it’s naive to think that clearer medical pricing alone would fix our broken healthcare system, it’s still sad that we can’t even take this first step towards smarter health care. So, if you agree, please forward this and other similar articles to your local reps in congress. Let them know that you demand real health care changes.