Higher Premiums and the Affordable Care Act — Why the ACA Isn’t to Blame

At one point, during my training, there were rumored threats that the hospital would close. Luckily for the community, under new leadership and with the help of the ACA, which flipped the uninsured-to-insured ratio, the hospital turned the corner and has grown into one of the most competitive healthcare systems in our local market. 

Now, with the specter of the Senate adopting the American Healthcare Act proposed by Republicans which would repeal the measures that allowed it to thrive and still provide care to the poor, the hospital’s future is again at risk.

The individual mandate of the ACA helped to reduce the uninsured rate and increased revenue for state subsidies. This mandate is probably one of the most hated provisions of the ACA. However, what is often not discussed is that many families that did not have health insurance unexpectedly lost their life’s fortunes when hit with an unexpected illness. 

Healthy individuals often will skip health insurance to save money. While Republicans can argue that they should face the consequence of their actions, when they get sick and don’t pay their bills, we all end up sharing in the consequence of their actions.  They either lose their savings to cover their healthcare costs or, being unable to pay their bills, they eventually file for bankruptcy. Both outcomes are bad for the individual and for society as a whole. 

The individual mandate encourages all individuals to get health insurance, even those who lack the foresight to realize that they can lose everything with just one unexpected illness. As the number of individual bankruptcy filings have decreased by 50% since the implementation of the ACA, legal experts have concluded that medical bills were likely the driving force behind the high rates of personal bankruptcy claims.⁷

Therefore, I do not believe that repealing the individual mandate, cutting insurance subsidies, and decreasing funding for Medicaid, as proposed by House Republicans who passed the more recent version of the American Health Care Act earlier this month, is a reasonable long-term solution. Remember that healthcare expenditures continue to grow. Nothing in the proposed bill aims to decrease that growth. Rather, the proposed plan would likely result in a decrease of the number of individuals paying into insurance pools, which would only accelerate the rate of premium growth.

The tax credits built into the Republican proposal are thought to offset this planned increase in cost, but those tax benefits are not based on predictions of how much premiums will grow. Nor do they consider the current rate of growth and the change in that rate that will result from the new bill. Given that the Congressional Budget Office (CBO) has not reviewed the proposal, it seems that the credits are arbitrary values that are unlikely to result in improved costs to individuals.

I believe that motivating people to have health insurance via a financial penalty that is consequently used to cover a portion of healthcare costs makes sense. However, I do agree with Republicans that this mandate is not the best solution. A universal healthcare system should improve preventative services, drive down the cost to manage chronic conditions, eliminate the redundancy in our fragmented system, and help us address issues with the futile resource cost associated with lousy, inhumane, end-of-life care.

Eventually, a universal system could lead to a more efficient, more successful, and more affordable healthcare system such as what many of our European and Canadian counterparts enjoy. 

References

 

1. ”Health Refrom FAQs.” Kaiser Family Foundation. Updated 2017. Available at: http://kff.org/health-reform/faq/health-reform-frequently-asked-questions/?gclid=CjwKEAjw3drIBRCOwfC-_qqyjQ8SJADvoWQpITmTpqYjDULuL94XDlFH-2BGmIeAB81XwFsQ8SJ–xoCQqHw_wcB#question-my-employer-offers-health-benefits-but-doesnt-contribute-much-toward-the-premium-i-cant-afford-my-share-can-i-apply-for-coverage-and-subsidies-in-the-marketplace-instead. Accessed May 18, 2017.
2. Khazan O.“Better Off Before Obamacare?” The Atlantic. Updated November 14, 2016. Available at: https://www.theatlantic.com/health/archive/2016/11/better-off-before-obamacare/507650/. Accessed May 18, 2017.
3. “State-by-State Look at Employer Health Insurance Costs Finds Workers’ Premium Contributions and Deductibles Growing More Slowly But Eating Up Greater Share of Incomes.” The Commonwealth Fund. Updated October 26, 2016. Available at: http://www.commonwealthfund.org/publications/press-releases/2016/oct/slowdown-in-employer-insurance-cost-growth. Accessed May 18, 2017.
4. Griggs T, Yourish K and Sanger-Katz M. “Who is Really Affected by Rising Obamacare Premiums.” New York Times. Updated March 9, 2017. Available at: https://www.nytimes.com/interactive/2017/03/09/us/politics/who-is-really-affected-by-rising-obamacare-premiums.html. Accessed May 18, 2017.
5. Emanuel E and Kocher B. “Higher Health-Insurance Premiums Don’t Mean the Affordable Care Act is a Disaster.” The Washington Post. Updated October 27, 2016. Available at: https://www.washingtonpost.com/opinions/higher-health-insurance-premiums-dont-mean-the-affordable-care-act-is-a-disaster/2016/10/26/1b7f7ce0-9b84-11e6-a0ed-ab0774c1eaa5_story.html?utm_term=.07e25b8ed31e. Accessed May 18, 2017.
6. Rizzo E. “Stats on the Cost of Readmission for CMS-Tracked Conditions.” Berkers Hospital Review. Updated December 12, 2013. Available at: http://www.beckershospitalreview.com/quality/6-stats-on-the-cost-of-readmission-for-cms-tracked-conditions.html. Accessed May 18, 2017.
7. St John A. “How the Affordable Care Act Drove Down Personal Bankruptcy.” Consumer Reports. Updated May 2, 2017. Available at: http://www.consumerreports.org/personal-bankruptcy/how-the-aca-drove-down-personal-bankruptcy/. Accessed May 18, 2017.