As I write these blog entries, I often ask myself, “Am I one of those negative people? Do I always see the downside?” For more than a year I have been writing with a cautionary, skeptical tone about whether the Obama Administration has bit off more than it can chew with federal healthcare reform. I really don’t want to seem negative and clearly have come around to agree with the essence of the law. All Americans deserve healthcare—as a right. But can we possibly accomplish that? And if we do, can we afford it?
Bloomberg News Service reported last week that the exchange cost will reach $5.7 billion in 2014. Politicians, who complained about the costs health insurance companies add to the system, are now adding bloat to an already cost-saturated structure. And it will get worse.
Without a functioning individual exchange, there is no healthcare reform. As we near January 1, the government will be forced to pump even more money into the individual exchanges to make them happen or risk the unthinkable: failure to launch. Already, everything that can be delayed has been. Multi-choice SHOP, discrimination testing, applicability of non-US-based coverage—all delayed. There will be more delays and more complexity.
This new healthcare system is a lot more complex than politicians expected. If they sit back, they might realize that the estimated 3.75% of healthcare spend that goes to health insurers to administer the private-payer system is not an unrealistic number. I predict that in hindsight, they’ll wish their system would cost only 3.75%.
And the lofty goal of adding 30 million Americans to the ranks of the insured won’t happen in the near term. In February, the CBO said that 5 million fewer people will gain coverage and that 8 million people may lose the health plans now offered through their employers.
My skepticism is proving to be well founded. However, I remain hopeful that we’ll find a way. This is too important for the United States, the leader of the developed world, to screw up.