How Not to Fix Obamacare: Part 4

They should have known how a kamikaze mission must end.

In my September 26, 2013 letter to the editor I characterized the Republican attack on the ACA or Obamacare as a “kamikaze mission” because of course the fate of the pilot is the same whether or not he succeeds in blowing up Obamacare.  But Republicans have exceeded my wildest expectations!  Whatever happens with today’s vote many political careers are going down in flames. While Obamacare has substantially reduced the number of uninsured, it has had little effect on the overall cost of healthcare at around 18% of GDP, which is expected to rise with the aging baby-boomer population. 

The fact is that healthcare costs in the U.S. have risen far faster than inflation over the last fifty years (not just since Obamacare) while other wealthy nations provide the comparable or better health care at half the cost.  Of 17 high-income countries studied by the National Institutes of Health in 2013, the United States had the highest or near-highest prevalence of obesity, car accidents, infant mortality, heart and lung disease, sexually transmitted infections, adolescent pregnancies, injuries, and homicides. On average, a U.S. male can be expected to live almost four fewer years than those in the top-ranked country.  A 2014 survey of the healthcare systems of 11 developed countries found the US healthcare system to be the most expensive and worst-performing in terms of health access, efficiency, and equity.  The only conclusions we can draw from this is up to half of cost of health care in the U.S. is a result of waste and somebody’s getting richer at our expense.  And from the number of wrong-headed ideas I’m hearing out of Washington, Congress remains oblivious to the back-door deals creating this waste.

Throwing the baby out with the bath water.

 For example here is what Paul Ryan is saying about his Obamacare replacement. Insurance companies will no longer have the burden of insuring those with preexisting conditions. Instead, high-risk pools will be set up for the millions with preexisting conditions.  He makes no pretense that premiums for those with preexisting conditions will be affordable to anyone.  What he is proposing is medical triage on a national level where we devote our medical resource to saving the healthy and leave those with known medical problems to rely on family, church and local government to care for them.  I just don’t think Americans are ready to believe the richest county on Earth has reached the level of desperation to abandon our most vulnerable citizens.  There are times when it makes sense to punish risk.  I started my insurance career in underwriting.  It was my job to reject risky ventures, forcing them to adopt safer practices or go out of business.  Risk is a cost of doing business and insurance performs a valuable service by eliminating the highest risks.  Unfortunately we can’t really force people to give up their preexisting conditions.  The best we could do is encourage early treatment to avoid the higher costs when symptoms go untreated.  This bill would do the opposite.  We punish bad drivers by charging more for auto insurance until they learn to drive safer decide to take an Uber.  The rest of us can feel safer because of underwriting.  But can we really feel safer without hospital insurance?

 What does make sense in terms of price discrimination in insurance is rewarding healthy practices such as exercise programs, safety courses and preventative medical treatment.  Of course the libertarians don’t want the government telling what to do.  We’re never going to make everyone happy but a little common sense will go a long way in sorting this out.