Saturday, December 12, 2015

U.S. Health Reform: Halfway There

When the Affordable Care Act passed in 2010, it was designed to take 10 years for full impact. The two main goals were to reduce the number of uninsured and to cut health care spending. Many of its advocates hoped it would eventually lead to single payer. Most of its opponents prayed it would fail and end in a more market-based system.

Well, it’s 2015. We’re halfway there. It’s time to evaluate what’s has transpired.

The results are ambiguous.

Medicaid and subsidized insurance exchanges has reduced the number of uninsured by 10 million from 45 million (14% of the population) to 35 million (11% of the population). From 2000 to 2012 overall health spending slowed, but spending picked up significantly in 2014. Premiums have increased, not gone down to the $2500 promised, and many haven’t been able to keep their doctors and health plans as promised, and the Congressional Business Office says ObamaCare effect of the employer mandate will reduce the hours worked by 1.5% to 2.0% from 2017 to 2014. The so-called “cost-curve,” money spent on care, has not been bent down and will go to $3 trillion this year, with projected growth of 5 to 6% per annum. Individual and Employer Mandates remain unpopular, as does the health law itself, with roughly 10% more Americans opposing the law than favoring it.

Practical alternatives to ObamaCare, which has underestimated costs and benefits and affordability for the middle class, and raised taxes by $1 billion, are not yet in sight. To sum up, fewer people are uninsured, and the impact on costs, quality, access, and health remains unclear.

And what about the ACA as a path to single-payer as a way to universal coverage?

That, too, is unclear. Vermont has had a go at it. With the help of Jonathon Gruber, the MIT consultant, who some consider the architect of ObamaCare, and William Hsia, Harvard economist, who developed Medicare price controls, Vermont has run into a problem – how to pay for single payer.

The Vermont single payer plan would have required the state to impose a total business payroll tax of 20%, a top income tax of 9.5%, and even then the state would have been deep in the red by 2020. Vermont’s Democrat governor, Shumlin, abandoned the plan with these words, “The potential economic disruption and risks would be too great for small businesses, working families, and the state’s economy.”

But as the late Senator Edward Kennedy proclaimed, in words to this effect, the dream of single player lives on and will never die. In Colorado, 100,000 voters have signed on to support the idea of single payer. Colorado’s disastrous experience with ObamaCare drives this quest for single payer. At end of 2013, in Colorado, with its population of 5 million, 335,000 cancellations were mailed to consumers because their plans didn’t meet federal standards, 200,000 more will be sent this year, and Colorado’s co-op, was shut down in October 2015, left 80,000 Coloradans stranded without health plans. The remaining exchange plans, on average will have premium spikes of 11.7%. A single payer plan in Colorado, called ColoradoCare, would double the state’s budget and require a 10% payroll tax to fund it.

One-size-fits-all government programs in the U.S, if the VA can be taken as example, have long waiting times. In Colorado, 4 of its 10 VA facilities, which serve 400,000 veterans, were among the 10-worst in the nation in wait times, with 11.5% of veterans having wait times of 30 days or more.

So here we are halfway there for the ACA. We’re halfway home for ObamaCare, but there’s still a long way to go from here to there.

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