ACA and AHCA Both Ignore the Same Problem

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The Affordable Care Act, or Obamacare, has been the subject of much political opprobrium, ranging from skyrocketing premiums (25 percent or more on average), which force so many families off the insurance rolls; deductibles as high as $12,700.00, which make a mockery of any rational notion of health care “coverage;” to the virtual forced withdrawal of health care companies from the exchanges in many states and counties, leaving many of them with as little as one available healthcare option.

Supporters of ACA generally reply, “Yes, maybe so, but so many more people are covered!” Hardly.

In the last quarter of 2008, it’s true that 14.6 percent of Americans did not have “formal” coverage, but instead relied on access to state public hospitals where no one, even illegal immigrants, were turned away. What ACA did not acknowledge was the way that America’s poorest citizens accessed healthcare. They did not deal or attempt to navigate complex plans, contracts, computer sign-ups or deductibles. If they needed medical care, they simply showed up at the public hospital, where they were treated (by law).

Unfortunately, the ACA ended up devastating many of these public hospitals, leaving the truly poor out in the cold. But by early 2017, after years of ACA implementation and the taking on of $1.3 trillion of additional taxpayer funded liabilities over the next decade, only a miniscule five percent drop or so in the number of “uninsured” had been accomplished. Even this dubious figure was arrived at by including people with such high deductibles and premiums that as a practical matter, these people could hardly be counted as “covered” except for political purposes.

The America Health Care Act (AHCA) is hardly any better, because like the ACA, it fails to realistically address the fatal flaw in any insurance plan which allows a purchaser to wait until an event occurs before buying the insurance.

This flaw can easily be seen in other areas of insurance. For example, how long would a car insurance company last if it permitted a person to get into an accident first, then afterwards say, “I want insurance to cover my accident?” The ACA purported to address this flaw by setting forth “penalties” for not getting insurance in advance of getting sick. In fact, however, these relatively paltry penalties were apparently never meant to actually be enforced. The ACA specifically provided that even if these penalties were never paid, the government was forbidden to enforce them by any realistic means such as levies, liens, lawsuits, or arrests of the kind available to enforce virtually every other violation of law. Although that theoretically left the IRS with the authority to deduct the penalty from a tax refund, the IRS, apparently wishing to avoid the public outrage if they ever actually did so, defaulted to the point of saying something along the lines of “we reserve the right to do so,” but not actually doing it.

It didn’t take long for people, including the almost 50 percent who don’t pay any federal taxes anyway, to realize that the penalties were little more than a joke and were paid only by taxpayers suckers who actually thought the word “penalty” implied at least nominal enforcement. Given this cynical failure to enforce the law for political reasons, the question under ACA remains the same: why would any rational person not wait until they get sick before applying for health coverage?

The AHCA’s solution to the problem of creating a sustainable health insurance plan that did not encourage people to wait until they were sick before signing up for insurance is only marginally less honest and unrealistic — namely, merely charging a somewhat higher premium later to anyone who waited to sign up for retroactive health insurance. Hardly a great incentive to pay insurance premiums before one got sick. The so-called “$8 billion reserve” that the AHCA set aside for those who choose to wait until they got sick before applying for health insurance was basically “chump change” in the context of the $1.3 trillion cost of the ACA.

A number of the nominal ACA supporters have been quite candid about their support: they know that such a plan could never be sustainable, but hoped that when it inevitably collapsed — which it is now on course to do — the resulting chaos would bring on cries for socialized medicine along the lines of the Cuban and Soviet model.

It should now become clear that politicians — even the most partisan and demagogic ones — should recognize that there is a rational course between health coverage that fails to adequately cover the poor and socialized medicine. Simplicity is the key. Re-authorize adequate funding for public hospitals, along the lines of VA and military hospitals, financed through a modest social security or Medicare tax, to provide bare bones coverage for everyone. Provide $40 x-rays instead of $1,000 MRIs, beds in wards instead of luxurious private rooms, satellite health service centers instead of expensive emergency rooms, longer waits in public treating areas than in private doctor’s offices, and so on. Those who wish to have more expensive and individual treatment would continue as they have under the present private insurance regimen, with most getting insurance through their employers.

Long before ACA and AHCA, anyone who broke a leg could go to a public hospital and be treated, regardless of whether they had “insurance.” That should remain the law.