1901 There Is a Way Out of the Muddled Mess of Obamacare
Health care is not garnering much attention in the news cycle right now developments have occurred that could provide a way out of the muddled mess of Obamacare.
A mess is happens when someone gets scammed with something that is too good to be true. It would be akin to enthusiastically gulping down a darkened bottle labeled as “Cure All Snake Oil” with no other assurance than that of the salesman. Unbelievably, that was the passage of the “you’ll know what’sin it after we pass it” “Affordable” Care Act (ACA).
The current situation in health care, not the care itself but the coverage of its costs, did not have to end up where it is at this point. In a phenomenal presentation for Hillsdale College, John Steele Gordon summ
arized the history of the institutionalization of health care insurance.
What became Blue Cross in 1932 began as a way for hospitals to increase their cash flow. In those days, hospitalization was a last resort and doctors were not visited at all unless something significant happened. The first plan originated in 1929 covered everything up to a 21 day stay for six dollars a month. In today’s dollars that would be just under$90 a month.
It didn’t take long for more milestones to hit the market. As medical science improved, that kind of plan could no longer be so generous. By the 1950’s separate “major medical” plans emerged to cover catastrophic costs. During World War II, employer-based insurance developed as a fringe benefit in order to attract workers while the vast percentage of the workforce was away fighting. By 1948, the IRS had ruled that the employer’s expenses for such coverage were tax-deductible. Proving to be a huge monetary boon for hospitals at the time, government entered the industry in 1965 with Medicare and Medicaid. The final nail in the coffin has been 50 years of uncontrolled litigation.
Given this history, Gordon correctly recognizes the end results. Hospitals do not operate on a truly competitive market basis. Instead, the competition is for referrals and traffic volume. Hospitals have gradually become magnets for many afflictions which would have been outpatient in the past and patients have been alienated from actual medical costs. As hospitals became more and more dependent on government funds, their care policies have become unavoidably linked to the ebb and flow of invasive regulation and politics. Finally, when the American Hospital Association and the American Medical Association successfully helped get Blue Cross exempted from most regulation as a non-profit, private providers were forced into the same model.
Enter Obamacare. In the context of this history, it becomes painfully clear that any federally-run health “insurance” scheme is in the end nothing more than an amplification of the very conditions which have led to the problems we face. Even the Dutch health care system (rated average worldwide-“Multinational Comparisons of Health Systems Data, 2018) has had to use a managed competition model (“Backgrounder: The Dutch health care system”).
Under the ACA, premiums have, on the average,doubled between 2013 and 2017 and the deduction for the “standard”family plan is over $8,000 (“Obamacare Premiums Continue to Rise, Time to Look at Real Health Care Solutions”). Between 2013 and 2018, The number of participating insurers dropped by two-thirds and in over half of America’s counties, there is only one insurance provider. Over 80% of those enrolled in Obamacare have actually been put into the Medicaid system (“The Health Care Choices Proposal: Charting a New Path…”)
The good news is that changes are happening. 2017 and 2018 were significant years. Congress eliminated the individual mandate penalty and delayed some ACA taxes. The Secretary of Health and Human Services began allowing states the ability to develop certain initiatives of their own. Through executive order,regulations were eased which allowed small businesses and the self-employed to associate. Pre-Obama regulations that had severely limited short-term, limited-duration plans were reversed. Best of all, a U.S. District Court just ruled the individual mandate to buy insurance and Unconstitutional under the Commerce clause of Article I, Section 8.
The Left constantly and effectively claims that conservatives have not offered any viable alternative to Obamacare. A good example is the joint statement issued by six leading medical associations – AAFP, ACOG, ACP, AOA, APA, and the AAP. They claim that, for example, the Health Care Choices Proposal would result in loss of coverage for the vulnerable, allow insurers to deny coverage, and limit “women’s healthcare services”. It makes one wonder if they have even read the proposal.
What the Proposal does do is call for the reversals of all the mechanisms of damage which John Gordon so effectively summarizes. It would replace the heavy-handed federal funding schemes. It would give block grants to state with important stipulations including 50% to provide coverage to low-income households and at least half more to help citizens purchase private insurance. It would repeal stipulations which force insurers to set rates according to the cost of all their market customers rather than on the needs of different groups of consumers. It would return control of benefit coverage categories to state control where regional requirements vary.
As important as the return of control to the states, the Proposal would make sure that customers once again are able to control their own choices. For example,anyone who is now under the CHIPS or Medicaid subsidies would be able to direct those funds to insurers of their own choice.
Remember the history. The only strengths that the Proposal lacks are two items noted by Gordon – absolute transparency by providers of all costs and charges and a reversion in law that forces the loser in a law suit to pay all the expenses. The further people are separated from their own spending and individual health care liberties, the worse the care they receive and the less their ability to hold providers accountable for how they are treated.