As presently conceived, health reform will fail. I’m talking not about the chances of a bill being signed into law but rather what happens when that happy day arrives.
I say this with deep regret, as I am an ardent advocate for health reform and a strong supporter of the President.
But we cannot force people of limited means to buy coverage they can’t afford, and we cannot force insurers to take all comers if people can opt out whenever they wish.
Without cost control, insurance costs won’t moderate, and without lower health insurance costs, many Americans can’t afford coverage. Despite the efforts of many, this seemingly-obvious conclusion hasn’t affected legislative efforts. Democrats are desperately trying to ram thru a huge entitlement expansion during a deep recession, while Republicans gleefully distort and demagogue, much more interested in helping the Dems commit political suicide than actually solve the health insurance crisis.
Over the last decade health insurance costs went up 131%; an annual rate of 8.7%.
If we are able to keep inflation to only 8.7% (doubtful in my mind), a family will pay $30,800 for insurance in 2019,
That inflation rate will moderate somewhat if everyone is covered (less need for cost shifting), but we’re still stuck with the prospect of forcing nursing aides making $12 an hour to buy coverage that they can’t afford.
To date private insurers have shown no ability to control costs; they’re too worried about on a reprise of the ‘managed care backlash’ of the nineteen-nineties when they should be thinking about the prospect of single-payer, a prospect that will look increasingly likely as health insurance costs approach $30,000 per family.
What does this mean for you?
There’s a lot of opportunities here for innovative, intelligent, creative approaches to coverage. Insurers and employers will have to leave their comfort zones and try solutions that will make them nervous, but the ones who do stand a much better chance of surviving than their conservative competitors.
Mar
5
I thought the idea was to enact a bill with an individual mandate, and then to get into serious cost reduction.
I’ve long since resigned myself to the reality that what will work can’t pass Congress, and what can pass Congress won’t work.
But everything can be improved. Consider: when Social Security was first passed, it didn’t cover great swathes of the population, most of them black. Also, Medicare, as first passed, didn’t cover prescription drugs. Yet the best way to reduce medical costs is to improve drug coverage. We still haven’t gotten Part D right, but the arc of history is long, and the wonderful 9th Amendment to the Constitution (my favorite even though the 1st assures my employment) assures that our laws are constantly living and evolving into the “more perfect union” that our mission statement promises.
I also think we are close to a tipping point of the type you suggest in your “what does it mean” analysis. And like the days before the fall of the Berlin Wall, we don’t realize how close we are. Notice: when the Clinton plan was scuttled in ’94, those pushing it over the edge were the insurers and the leaders of corporate America. This time, those two are leading it by the hand.
That’s important because all the economists who have proposed things that would work have said for years that we wouldn’t improve our situation unless corporate America — the large employer sponsors of group coverage — took the lead. I’d argue that they have. I am hearing more and more purchasers of group benefits telling vendors of disease-management programs and the like to shove it until they can deliver ROI, demanding better, and making it happen.
Your pessimistic view is only warranted if you think this healthcare reform bill is the destination. If you see it as the beginning of a turn away from the unsustainable status quo — and I think it is — you might feel differently.
Doesn’t a decade increase of 131% break down to 13.1% a year?
Or is the 8.7% figure year over year (e.g. each year’s increased premiums adding up thanks to the previous year’s 8.7% hike getting added to the pile) ultimately adding up to a cumulative 131% from what they were after 10 years?