If Republicans and Democrats really want to help people access quality care at an affordable price, they would do better to come up with a hybrid single-payer, private insurance system.
Charleston Post and Courier
May 14, 2017
BY ED BUCKLEY, editorial writer for The Post and Courier.
The Republican’s health care bill passed the House earlier this month, but so far it’s getting about as warm a public reception as did Obamacare when it was rammed through Congress back in 2010 — which is to say almost everyone hates it.
The interesting thing is, the American Health Care Act isn’t really that awful of a bill. At least it’s not substantially more awful than the Affordable Care Act, which it doesn’t quite replace so much as mangle and leave dying on the side of the road.
Both bills suffer from the simple fact that they don’t do nearly enough to address the only problem they’re designed to fix — helping people access quality health care without going broke.
On that score, the Affordable Care Act has actually been much more successful than most people give it credit for. It allowed a lot of lower- and middle-income people to access health insurance that was good enough to actually pay for needed services.
I know because I used Obamacare health insurance for a couple of years, and I got a lot of mileage out of it.
The American Health Care Act would probably make some insurance plans cheaper for young, healthy people, but those plans also wouldn’t pay for as much stuff, so the benefit would be negligible.
And that points to the deeper problem.
Health insurance just isn’t a very efficient way to pay for most health services. It’s a raw deal for people buying health insurance, for health insurers themselves and for doctors and other medical care providers. It’s wasteful all around.
Let’s start with consumers. In South Carolina, the average person with an employer-provided health insurance plan paid $1,220 in annual premiums in 2015, according to the Kaiser Family Foundation. Their employers chipped in another $5,880.
That person has effectively spent $7,100 out of his paycheck for health services he may or may not use.
Bizarrely, the best case scenario for said consumer would be to not use any of those already-paid-for health services at all. Deductibles range on average somewhere between $500 and $1,500, so that’s another huge outlay of money before the insurance even kicks in.
In other words, an average health insurance consumer in South Carolina might have to spend upward of $8,600 before an insurance company even starts to “save” him money on health care.
That doesn’t seem like a very good deal.
Even more bizarrely, it’s also not a very good deal for insurance companies — at least up front. If a customer paying $7,100 per year for insurance needs only the occasional routine care, an insurance company will probably turn a healthy profit. But it would only take one hospital stay to blow through that profit and then some — to the tune of a few hundred thousand dollars in some cases.
And given that insurance companies effectively make money by having customers pay into the system and receive little or no care in return, it’s a mess for doctors too.
That’s because medical providers often have to spend a significant portion of their valuable time fighting with insurance companies just to get reimbursed for basic services.
And good luck getting an insurer to pay for experimental treatments, non-generic or off-label prescriptions and any number of other potentially beneficial, doctor-prescribed therapies.
If that’s not the “rationing” of services that detractors so often wail about when arguing against a single-payer health care system, then I’m not sure what is. Insurers routinely wedge themselves between doctors in patients in ways that don’t exactly scream “free market.”
The whole concept of insurance generally only makes sense when protecting against catastrophes — fires, floods, car wrecks. That system breaks down when paying for routine health procedures, doctor visits or prescription drugs.
Those things are guaranteed necessities, not unplanned disasters. And an insurance model will inherently be wildly inefficient at paying for necessities.
If Republicans and Democrats really want to help people access quality care at an affordable price, they would do better to come up with a hybrid single-payer, private insurance system.
The government would pay for most basic services — routine doctor visits, basic medical tests, generic prescription drugs, birth control, mental health treatment etc. And mandatory low-premium, high-deductible insurance would cover catastrophic emergencies.
To keep things competitive, the states could also offer their own catastrophic plans.
Given the amount of money most people already pay for health insurance — whether they use it or not — such a system would almost certainly be a better deal for most consumers. And it would remove much of the financial anxiety and uncertainty related to accessing vital health services.
The American Health Care Act might actually be able to limp out of the Senate in some form and get President Trump’s signature. It probably wouldn’t be the apocalyptic disaster that so many Democrats are predicting. It might even save people some money on their insurance premiums.
But it also probably won’t really make anybody healthier. And if that’s the case, then what’s the point?