So, the Affordable Care Act’s (ACA’s) individual mandate penalty has been reduced to zero, the Cadillac Tax has been delayed for two more years (and may likely never be implemented) and the Children’s Health Insurance Program (CHIP) has been funded for six years. Now more than 1.75 million children in 20 states, who were at risk of losing their healthcare, can breathe more easily. Also, the Health Insurance Providers Fee, which was off in 2017 and now back on, will be off again in 2019. Medical devices won’t be taxed for two years. And let’s not forget the recently-expanded Association Health Plan (AHP) rules, which if you can get a carrier to underwrite, could remake healthcare insurance costs for those fortunate enough to participate in an associate pool consisting of “good risk.”
Seems like there have been a lot of changes. But look a little closer:
- Individual Mandate – this brings us back to the days of healthy Americans rolling the dice. But, ultimately taxpayers or others that purchase insurance will bear the cost of the uninsured that do get sick.
- Cadillac Tax, CHIP, Health Insurance Providers Fee, Medical Device Taxes – these are just tax vehicles to pay for care.
- Association Health Plans – these are vehicles to separate risk, not control it.
None of these changes impact the real issue – THE COST OF CARE. I just don’t get it. There are a lot of smart people in government, but no one seems to grasp that shifting costs from one group to another has little impact on the actual price.
We need to fundamentally change the misalignments in the U.S. healthcare system. We need to better align incentives so that appropriate care is administered in a cost-effective matter. We need to eliminate wasteful, duplicative care and reform the tort laws. We need to reign in drug cost abuses – and there are many which I have written about (see here, here, here and here). Here is another – why do we have double-digit inflation on long-established generics when the general inflation rate is close to zero? Who gives these companies the right to soak consumers?
And why is this system so confusing? Healthcare needs to be more transparent. I went for my annual physical exam, which is supposed to be free but ended up costing me hundreds of dollars because of little issues (like a new shingles vaccine, which was not covered). No wonder people are afraid to get care.
This is where the debate needs to head.