I’ll stipulate to this – ACA needs major fixing. See below, and multiple past posts, for my take on what’s needed. Unfortunately that doesn’t look likely. The internecine warfare among Republicans over the American Health Care Act was inevitable, and will not be easily resolved.
That’s because there’s no consensus among Congressional Republicans on what healthcare reform should look like, who should pay for it, or what the priorities should be – access, coverage, cost control, less government intrusion, lower taxes, budget deficits are all in play, and many conflict. There’s also palpable and well-justified fear of the conservative infrastructure, a force including media outlets, think tanks, consultants, donors, and fringe groups that is extremely vocal, very powerful, and critical to the political future of individual Republicans.
Outside the reliably Republican world there is even more danger lurking.
What’s not being reported is this – If AHCA passes, the Republicans are in deep trouble. 10 – 15 million Americans will lose coverage (and loss aversion is powerful indeed). Insurers will drop out of many markets overnight. Hospitals, especially in rural America, will get crushed due to lower reimbursement and higher bad debt. Trump voters who believed him when he said he’s lower costs and improve insurance are going to be disappointed indeed. Deficits will go up.
Thus Republicans are in a can’t win situation; they have to deliver on impossible campaign promises, and if they do, voters will blame them for loss of coverage, higher prices, and anything and everything related to healthcare.
While Republicans battle amongst themselves, the medical provider community – AMA, AHA, American Nurses Association – just about every national interest group has come out firmly against AHCA. Insurance companies are warily walking the fence, not willing to provoke a tweetstorm but concerned indeed that AHCA will pass and their risk pools will crater. Seniors are up in arms, outraged that they’d have to pay more (!) for insurance if younger people don’t subsidize their needs.
There is a possible compromise bill, Cassidy Collins does offer some hope as it would likely garner support from both sides of the aisle if it gets any attention – and a lot of modification along the way. But that is a very big “if”.
While all have different and specific issues, the net is this: AHCA will not lower the cost of care, and will increase the number of Americans without health insurance by at least 10 to 15 million people at the outset.
If AHCA passes, that number will inevitably increase as insurers’ risk pools experience worsens when fewer young people enroll, driving up costs for older folks. The death spiral in the individual markets will accelerate until…something happens.
There’s no question ACA needs fixing.
- An excellent start would be to re-fund the risk corridor program killed by Sen Rubio in 2015 when he was able to force thru defunding of risk adjustment in the budget agreement.
- Adding a public option to markets with limited choice would provide an insurance backstop, much like residual markets in workers’ comp.
- Increasing the penalties for failing to carry insurance is another wise step.
- Replacing deductibles with co-insurance requirements would help ensure people could afford the care they need while making sure the high-utilizers think long and hard about their medical care.
- Requiring all to take greater responsibility for personal behaviors that increase health risks should be front and center. Obesity, substance abuse, medication adherence and failure to utilize preventive medicine should all be addressed
The intractable problem is cost. AHCA focuses on insurance markets, subsidies, eligibility, and credits. It does nothing to address what drives cost – the massive waste due to unnecessary care and inflated prices for drugs, services, devices.
What does this mean for you?
AHCA won’t pass, a fate Republicans should be forever grateful for.
I don’t share your certainty that the AHCA won’t pass. It appears there won’t be a republican member of either the House or the Senate who will risk a ‘tweet storm’ by the president if they refuse to fall in line and do as they’re told. They recognize that among republicans, the president holds huge approval numbers, and members of congress fear losing their jobs more than they care about the health and well being of their constituents.
If ACHA passes, the next logical step to take to solve the mess it will leave us with will be single payer, because as Churchill said, you can always count on Americans to do the right thing after trying everything else. What else would there be after the “repeal” of ACA with ACHA but single payer? If your predictions above are correct, then the only way everyone will get covered is by single payer. The GOP may have just made that possible.
This entire conversation around healthcare reform is looking at the trees and not the forest. The problem with healthcare in the US is that it costs too much. Substantially more than it does in other countries. ACA and any replacement bills are not fixing healthcare. Instead the focus is providing insurance. This doesn’t address the cost issue which is keeping even those with insurance from affording treatment. Why do drugs cost so much more here than other countries? Why is there so much price differentiation between facilities and payers for the same services? Why is there no transparency in pricing and outcomes.?
Fixing healthcare required Congress to actually look at the problems facing healthcare. Insurance is a band aid for a much bigger problem. For years now the focus has been on the wrong issue. How do we change the conversations to focus on the real issues?
Joe,
I have to respectfully disagree that the focus should be on fixing the ACA. I’m sorry but I just don’t see how any of those ideas your offering bends the cost curve, which in my estimation is the biggest problem with the ACA and the Republican’s equally horrible plan.
Until we focus on the true problem, the cost of health care vs. cost and access to health insurance, we’re simply rearranging the furniture on the Titanic.
That being said I’m quite confident the number one driver of the high cost of care in the US is the Federal government. Idiotic laws and regulations that crush innovation, massively increase frictional costs, and incentivize bad behavior are the real culprit. Add to these the fact that many of these laws and regulations are more an attempt at social engineering than improving care and lowering costs and the problems only grows.
If the Republicans running the show could get their act together (which seems unlikely – and which the Dems failed to do), they’d focus on ways to reduce cost vs. the crap they just offered up. There’s many things that can be done, some easy, some that will require more political will.
It’s unfortunate that the battle lines have been drawn around the ACA vs. AHCA, they’re too busy trying make each other look bad and don’t realize they’re fighting the wrong war. Focus on reducing costs and the insurance side of the equation gets a lot easier.
Thanks.
Mike – thanks for the thoughtful comments and observations. The inherent problem is, indeed, cost. However, the politicization of the cost issue is done very effectively by many stakeholders, and this is what is killing any real reform.
As I wrote last week, reforming health care means less revenue for pharma, healthplans, consultants, device companies, providers. The lobbying these groups apply is beyond compare and extremely effective.
Two examples. Pharma played a big part in convincing the GOP to pass Part D, which was a huge benefit to pharma. No cost controls whatsoever, and no concerns about the $16 trillion added to the deficit.
Spine surgeons pretty much killed federal research into back surgery – and they emasculated the federal agency tasked with rationalizing care, the Agency for Health Care Policy and Research, because AHCPR had the temerity to publish incontrovertible evidence that most back surgery was unnecessary if not harmful.
I’d agree that both bills do far too little to control costs – but the reality is politics is the “art of the possible” and given the huge influence of lobbying and the sheer volume of money sloshing back and forth in DC what’s possible is often dollar-driven. That being the case, getting corporate and other big dollar donors out of national politics would be a great start – and realistically is the only real solution.
Re ACA, several attempts at rationalizing care – end of life consulting reimbursement and development and dissemination of guidelines via PCORI – were demonized by opponents as “death panels” and “government-mandated medicine”. As usual, Democrats totally caved, lost the messaging battle, and hid behind weasel words.
I do think my list has some potential to bend the cost curve. Replacing deductibles – which are stupid, outdated, and counter-productive at best – with co=insurance forces high utilizers to care about their decisions far longer than deductibles do. Today, once they blow thru the deductible, it’s all free to them (some plans have coinsurance after that, but it’s nominal).
I have a different perspective re the federal government’s role and competency. It’s not the workers, it’s the politicians. The workers KNOW what needs to be done, but no one will let them (see AHCPR). Perhaps because my parents were both civil servants (CIA) and my sister and her husband were both FBI and my aunts and uncles mostly worked for the feds, my view is most government workers are generally competent and good people who really try to do the right thing. However, Congress often saddles them with stupid stuff they have to implement, which makes their jobs brutally hard (the sequester essentially killed my sister’s job training new field agents at the FBI Academy in Quantico, while Congress was also screaming at the Bureau to do more re terrorism). Add to that the almost universal derision directed at them, and its amazing any show up to work at all. If your bosses told you repeatedly that you were the problem and not the solution, that you were overpaid and underworked, it would be pretty demoralizing.
We’ve all worked at organizations where some of the bosses were numbskulls; imagine having 566 “bosses” of which a large percentage met that definition. Hell, I’d smoke dope too!
My inner “small government / free-market guy” just needs to stretch his legs once in a while via a nice cathartic comment on MCM, thanks for providing the forum.
Absolutely I agree there are many competent government workers strangled by the bureaucracy of the system, my comments painted with too broad a brush. That being said, I’m not wrong, poorly designed laws and overly burdensome regs (not government workers) are the single biggest driver of high health care costs.
I know you’ve posted many times on the cost piece highlighting barriers and possible solutions. I appreciate that this is not lost on you.
I’m not sold on the co-pay vs. ded argument as a means to control cost but I readily admit you’ve got probably more information on that than I do so I probably need to think a little more about that.
Regardless, current plan designs incorporating large deductibles stink, and for many are a significant if not insurmountable barrier to care. Thankfully, I’m starting to see that there’s more recognition of this issue. If lowering deductibles and shifting to more of a co-pay model increases access to care that’s good enough for me, if it also lowers costs than than its a no-brainer.
BTW – you’ve got an interesting family there. I should probably start using an alias and VPN when posting in the future
Always good to connect and hear other perspectives. Especially when they are so entertaining. No worries about my family, they’ve retired and I’m the guy tasked with paying the taxes to support them all.
Joe, thanks for a good summary.
You may be right that some carriers will exit the market immediately when mandates disappear.
In some states, this will be a crisis that makes the current Congressional debate seem like child’s play.
What if a state or region has NO carriers?
Basically the governors in these states will have to re-establish all the reinsurance and risk adjustment funds that the Republicans gleefully gutted. The Ryan bill allocates $15 billion nationwide to do this kind of thing, but that may not be enough.
Also, the impacted states will have to allow enormous premium increases.
This will all have to happen fast.
Many of us 70-plus who paid into it will die if the GOP healthcare bill passes. They want us to die, and some of us will commit suicide. We are of no use anymore. In other countries the elders are not discarded but because they have earned respect, are cared for, rich and poor. Rather than be homeless and/or be in pain, many of us would rather die. The so-called healthCARE bill is going to pass.