Many supporters of the ACA look to its record of reducing the numbers of uninsured over the last five years as solid evidence that it is working. Paul Krugman, Nobel laureate in economics, has been in that group for years, recently touting the drop in uninsured numbers as sufficient evidence to declare the ACA a success. Much as I have admired his work in economics over many years, I remain surprised that he still gets it wrong on U. S. health care.
Krugman is still wedded to supporting some 1,300 private insurers, mostly for-profit, that continue to put their profits above serving patients in what has become an unsustainable system propped up by government subsidies. As a cheerleader for the ACA in his recent New York Times Op-Ed, he has this to say:
Obamacare has led to a rapid drop in the number of uninsured, especially in states that have fully implemented its provisions. . .meanwhile, the whole thing has come in well below projected costs; insurance premiums will rise in 2016, but after two years of remarkably small increases that still leaves things cheaper than expected. (1)
We need to drill deeper to see if we can declare the ACA a success: Yes, the numbers of uninsured have decreased, a welcome change and helpful to patients involved. What that metric misses, however, is the large number of Americans still uninsured, the growing epidemic of underinsured Americans, the continuing inflation of less affordable health care costs, the increasing numbers of people who forgo necessary care, the waste and profiteering that limit access and quality of care, and the lessons from most other advanced industrialized nations that have found ways to provide universal access to health care at much less cost and with better quality through one or another kind of public financing.
- About 16 million people have received new coverage under the ACA either through the health exchanges or expanded Medicaid, but there will be 29 million nonelderly people uninsured in 2016, with 26 million still uninsured in 2025, according to 2015 projections by the Congressional Budget Office. (2).
- 31.7 million Americans are considered underinsured because they spend so much of their household income on medical bills (3).
- Almost 30 percent of privately insured, working age Americans with deductibles of at least five percent of their annual income have a medical problem for which they don't go to a doctor because of costs. (4)
- Private insurers still have many ways to discriminate against the sick, including benefit designs that limit access, restrictive drug formularies, inadequate provider networks, high cost-sharing, and deceptive marketing practices. (5)
- Insurance premiums for many companies will go up big time in 2016--as examples, Blue Cross/Blue Shield plans, market leaders in many states, are seeking rate increases of 54 percent in Minnesota, 51 percent in New Mexico, 37 percent in Kansas, 36 percent in Tennessee, 31 percent in Oklahoma, and 25 percent in North Carolina. (6)
- The ACA has encouraged consolidation among insurers and hospitals, in both cases leading to less competition and higher prices through market dominance. (7)
- This latest round of mergers will leave us with three insurance giants--Anthem/Cigna, with a combined membership of 53.2 million, United Health Group (with 45.8 million), and Aetna/Humana (with 33.5 million). (8).
- According to the 2014 Milliman Medical Index (MMI), total health care costs, including insurance, for a typical family of four with employer-sponsored insurance came to23,215 (9), including payroll deductions and out-of-pocket costs, an impossible burden compared to the median household income in the U. S. that year of53,657. (10)
- At least 22 states are facing budget shortfalls for the 2016 fiscal year, further threatening already underfunded Medicaid programs.
- There are no significant price controls under the ACA, which, for example, still bans Medicare from negotiating prescription drug prices, as the Veterans Administration has done so well for years.
- Overbilling by hospitals is common, and up-coding of physician services is epidemic. (12)
- According to recent projections by the Centers for Medicare and Medicaid Services (CMS),2.757 trillion will be spent for private health insurance overhead and administration of government health programs (mostly Medicare and Medicaid) between 2014 and 2022, including273.6 billion in new administrative costs for the ACA's expanded Medicaid program (which is 11 times the administrative overhead of traditional, non-privatized Medicare). (13)
While it is tempting to look at just one metric--the decline in numbers of the uninsured, this is a trap if used to deceive ourselves as to the success of the ACA. As the above examples indicate, we still have a long way to go before we can say that we have reformed U. S. health care in the public interest.
1. Krugman, P. Delusions of failure. New York Times Op-Ed, October 24, 2015.
2. Insurance coverage provisions of the Affordable Care Act. Congressional Budget Office, March 2015 Baseline.
3. Cohen, RA, Martinez, ME. Health insurance coverage: early release of estimates from the National Health Interview Survey, January-March 2015. National Center for Health Statistics, August 2015.
4. Levine, D, Mulligan, J. Overutilization, overutilized. J Health Politics, Policy and Law, April 2015.
5. Ungar, L, O'Donnell, J. Dilemma over deductibles: costs crippling middle class. USA Today, January 1, 2015.
6. Patient advocacy groups. Letter to Sylvia Burwell, Secretary of Health and Human Services, July 28, 2014.
7. Goldstein, A. Price to jump for most popular health plan in Maryland insurance exchange. The Washington Post, September 4, 2015.
8. Mathews, AW. Health law speeds merger frenzy. Wall Street Journal, September 22, 2015.
9. Mattioli, D, Hoffman, L, Mathews, AW. Anthem nears $48 billion Cigna deal. Wall Street Journal, July 23, 2015.
10. Armour, S. Health costs hinge on Supreme Court's ruling. Wall Street Journal, May 25, 2015.
11. 2014 Census ACA Data. Department of Numbers. Washington, D.C. http://www.deptofnumbers.com/income/us/
12. Associated Press. Medicaid enrollment surges, stirs worry about state budgets. July 19, 2015.
13. Nader, R. In the Public Interest. The crime of overbilling health care. The Progressive Populist, October 1, 2014, p. 19.
14. Himmelstein, DU, Woolhandler, S. The post-launch problem: the Affordable Care Act's persistently high administrative costs. Health Affairs Blog, May 27, 2015.
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