The truth about healthcare affordability

September 18, 2012

Healthcare policy is one of the main issues in this year's election. At the core of the debate is affordability.

The fundamental political promise of the Affordable Care Act is that all American residents can have all the healthcare they want, whenever they want, from wherever they want, without having to pay for it. Any rational person recognizes this promise is impossible, but it resonates with many people as a sort of wishful thinking.

The problem's complexity is not easy to explain because of the "sound bite" culture we have in today's politics.

Some things are undeniable. The current system is not affordable. Medicare is insolvent, and will go completely bankrupt unless the age of qualification is raised. Many state Medicaid programs are also insolvent. Unquestionably, doing nothing is unacceptable. However, the ACA is an ideological effort which is fatally flawed and cannot be fixed.

The Congressional Budget Office counts on a 27 percent reduction in payments to doctors in January 2013, and a subsequent 3 percent in both 2014 and 2015, which will not improve service or add doctors. The promise that the ACA would lower insurance premiums turned out to be untrue and insurance premiums have risen since its passage. Also untrue is the promise of increased access to care and the promise of affordability of insurance for those with pre-existing conditions.

The result of the highly touted mandate allowing children to stay on the family policy until age 26 has had no effect except to raise premium costs. The net effect on employees thus far has been to raise the employee's cost for family coverage four-fold over previous out-of-pocket costs, according to the Kaiser Foundation. The number of physicians retiring from the profession has increased and it is increasingly difficult to gain access to a physician.

Little known but true is that ACA mandates a doubling by 2014 in the monthly premium cost of Medicare to recipients, which is deducted from their Social Security checks, according to the Center for Medicare and Medicaid Services. The promised IRS subsidy for those buying health insurance themselves from state exchanges is not panning out because very few states are creating exchanges.

There is universal consensus private health insurance will completely disappear by 2016 because of the legislation phase-in. That is inherent in the law's design. Anyone who denies the law's intent is a single-payer system with government-mandated cost control and rationing is disingenuous or has likely not read the bill.

There are solutions: eliminate the tax benefit discrepancy for deductibility, increase the personal responsibility for costs, restrict the safety net to those that are absolutely needy, re-introduce the free market for cost containment, reform tort law, and eliminate fraud.

It is true there are serious healthcare issues which need addressing. Sadly, the cost of health care in the United States is an unintended consequence of government interventions and it is pointless to think further intervention will create a different outcome.

Dr. Chris Casscells
director, Center for Healthcare Policy, Caesar Rodney Institute

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