What's Health Insurance Done For You Lately?
The fundamental flaw of the Affordable Care Act is the health insurance business model. From the journal "Health Affairs" (http://healthaffairs.org/blog/2012/06/26/private-insurance-is-bankruptin...)
Everyone agrees that there’s a cost crisis in the American health care system, but little attention is being paid to a major piece of the problem—enormous private insurance costs resulting in exorbitant premiums and cost-sharing for Americans. The focus instead is on Medicare’s costs. Policymakers are struggling to find ways to cut Medicare spending in order to slow the growth of the federal deficit, and some have even proposed greater (even total) reliance on the private market to reduce costs.
The private insurance system is already beginning to fall apart. Even though household spending has fallen dramatically as a share of total national health care spending (relative to spending by employers and the government), costs have risen so much that Americans are paying more for health care than they ever have. Over the last decade, health insurance costs doubled for the average family of four, and health costs ate away at real income, eliminating any wage gains that occurred.
Health insurance premiums (for both employers and workers) now amount to one-quarter of median family income and are projected to rise to 35 percent in the next decade. And these higher premiums are buying thinner and thinner coverage: We are paying more and more every time we go to the doctor or hospital – deductibles and copays have risen rapidly over the last decade. The share of workers paying a deductible greater than $1,000 has risen from 10 percent to over 30 percent since 2006.
Costs are rising for employers as well, and the share of workers who even receive insurance from their employer is plummeting, having fallen from more than 69 percent to 61 percent in the last 10 years. Meanwhile, fewer large employers continue to offer supplemental coverage to retirees. Since the early 1990s, the percentage of large employers offering retiree coverage has fallen from 40 percent to only 21 percent.
Ballooning costs in the private insurance market are all the more concerning because they drive up the prices facing Medicare. According to Glenn Hackbarth, chairman of the Medicare Payment Advisory Commission (MedPAC), the inability of private insurers to control prices is responsible for the constant upward drift of health care costs that is putting fiscal pressure on Medicare.
Shifting Americans with Medicare into private pools is not a serious solution to the rising cost of health care, given the far higher costs in the private sector. Privatizing Medicare, or even raising the age of eligibility and forcing more of our parents and grandparents into the commercial market, would actually raise overall costs, and it would only save the government money by forcing more of the cost burden onto people who cannot afford it.
The private health insurance system is the problem. It can not be the solution. It is Obama's (and Romney's) folly to force people to buy this wasteful, defective product. We should be looking for ways to eliminate the health insurance business model, not prop it up with state and federal legislation.
Dr. Joe Jarvis