Here’s the thing. It’s only one view that America bends toward an arc of diversity, inclusion and justice. There is another view – felt to be every bit as compelling to those who just happen to be represented by those who won the last election and control the various branches of government. In this view, personal responsibility and individual freedoms are the compelling freedoms of America, and redistribution of wealth toward the less fortunate is labelled an “entitlement” instead of part of what binds a nation together.
These competing interests have long played out in healthcare. It explains the reason that America has long been the sole major industrialized nation in the entire world that doesn’t provide universal health care and, by a large amount, demonstrates disparities in healthcare largely attributable to one’s financial status.
To say that America is a democracy is to say there are roughly equal parts liberal and conservative forces that can influence policy if and when given the opportunity. However, America is a capitalist nation without a counterbalancing force toward socialism. Historically, part of the social construct of nations with its citizens has been to, at a minimum, provide certain protections equated with socialism, including health, education, welfare and police protection. It is of interest to note that, in our capitalist society, there have always been efforts to further the capitalist experience and privatize these fundamentals. In the example of healthcare, these forces have outweighed the calls from those seeking universal healthcare or consideration of healthcare as a right.
It is in this vein that I view the current conversation on health care. One must appreciate the United States does not have a healthcare system. We have a healthcare industry that represents 1/6th (17%) of the U.S. economy (comparatively, the next largest country spends approximately 11% of it’s gross domestic product on healthcare). Appreciate this point. Of all the corporate “too bigs to fail,” the healthcare industry is especially legitimate. To shrink the healthcare industry by compelling a truly socialist healthcare system (meaning assets are owned and run by the government, complete with cost controls) would drive so many industries out of business, it would crash the economy beyond recognition. Right about now, for those of you who’d state that “healthcare for all” is the “right thing to do,” I should remind you that capitalism has no moral check. It’s governing principle is the so-called “invisible hand,” describing a force in a society in which everyone is pursuing their own individual gains, and in which the sum total of these efforts will generate desired end results across the board.
And so with healthcare, the purely capitalist approach would be to deliver care in total to the markets and the entrepreneurs chasing profits. Theoretically, competition would drive down costs and increase services in order to better attract customers. In this example healthcare outcomes are an offshoot of the industry, not the primary concern of a system.
Let’s look at five defining features of the American Health Care Act. I’ll list some facts first, then provide a bit of commentary.
- There will no longer be either a requirement or an entitlement to have health insurance. Of course this means there will no longer be a government-sanctioned entitlement to healthcare for all. If you believe in “personal responsibility,” you applaud this consideration. If you believe in a “social safety net,” not so much. Additionally, many of the taxes in place to fund the ACA would be eliminated.
- There will no longer be an employer mandate to provide health insurance. The employer mandate, which required companies with 50 or more full-time workers to offer insurance or pay a tax, will be going away. For many, the first impulse is to ask how employers could be so heartless. For others, the first question involves why employers have to provide insurance anyway. It was established a century ago as a competitive measure by companies, and later it became a requirement with the success of American unions. It just happens to be the case that the same levels of competition for employees and needs to provide benefits no longer exist, and employers are anxious to enjoy greater profits where possible.
- The Medicaid expansion created with the Affordable Care Act (aka ACA, Obamacare) will be phased out by 2020. For states having accepted the expansion, this will affect low-income families, pregnant woman, children, the disabled, and those over age 65 with incomes up to 138% of the federal poverty level (about $16,643). In this context, phased out means there will be no new enrollment and anyone allowing a lapse in coverage for more than one month will not be allowed to enroll.
- If you have commercial insurance, the so-called essential health benefits established under the ACA will remain. These include maternity care, mental health care and prescription drugs. Beginning 2020, state Medicaid plans would not have to meet this requirement. Additionally, young adults under age 26 will still be able to remain on their parents’ plans and insurance companies will not be able to deny insurance to those with preexisting insurance, given these individuals have preexisting insurance. However, under certain conditions, insurance companies will be allowed to charge up to 30% higher premiums for one year to such individuals.
- Financial assistance to help purchase insurance will change significantly from the ACA. The new plan would shift tax credit to those purchasing insurance away from income-based considerations to age-based considerations, even though insurance companies will be allowed to charge the elderly up to five times more for coverage than younger Americans. The net effect of this will be a lot less use of the system. Your insurance card will have a lot less value dollar for dollar compared to what you’ve had historically.
If you are in a rush to declare this bill a failure, it’s because you are of the mindset (in step with the rest of the world) that health care is a right, and insurance is necessary to provide healthcare. Of course, the point is that’s not the objective of those seeking to eliminate the ACA; in fact, the plan retains many, if not most of the programmatic elements of the ACA. It’s not just the ACA that these politicians are looking to eliminate. It’s the idea that healthcare is a right. It’s any notion that the government should financially support an entitlement. It’s the notion that the free market wouldn’t best regulate services and costs. It’s the notion that employers should be forced to provide benefits in this manner. So when the Congressional Budget Office tells you that between 6-10 million less people will be insured than currently are, and there won’t be cost savings to the citizenry, remember: that never was the objective. Remember this, which is perhaps closer to the true motivation of those perpetually inclined to distract you while pursuing truer interests in a stealth manner: the 400 highest-earning households in the country would get an average tax break of $7 million per year under the proposed American Health Care Act.
In the meantime, here’s what is expected to complete “access to care” for all of the newly uninsured.
Feel free to ask your Sterling Medical Advice expert consultant any questions you may have on this topic.
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