This is the sixth column in my series about health care. Hopefully it will be my last — for a while, at least. I hope that the previous columns have improved your understanding of the health care issues we face and why changing the Affordable Care Act (ACA) is going to be difficult.
In fact, I am not optimistic that we have the political resolve to meaningfully improve the ACA.
The biggest single change that will have the most positive impact is to place everyone in a single risk pool. That means that everyone is placed on a level playing field and would pay a similar amount for basic coverage.
Currently, about 60 percent of the population is covered by employer-sponsored plans. These people have two advantages over the rest of the population.
First, they are in a risk pool that contains a healthier segment of the population than the population as a whole. That means their cost of coverage is lower.
Second, for many, their employer pays the cost of their coverage, or a large portion of it, and they are not taxed on this benefit. These people understandably do not want to give up their benefits.
Just ask Unite Here union organizer Andrew Cohen, who was quoted in The Signal’s Feb. 23 edition: “This decision to place the Trump care tax on employer-sponsored health care is going to make health insurance less affordable, or in some cases, inaccessible to working Americans who currently have it.”
The point missed by Mr. Cohen and others is that people who have employer-sponsored health care have a better deal than the remainder of society. Their health care costs, which already are lower than most, are subsidized by the government.
Putting others on an equal playing field means that those with the cheapest health care are going to have to give up something—if nothing more than the government subsidies of their health care coverage.
Because this 60 percent of the population has significant political clout, they may prevail, making it impossible to reduce premiums for the remaining Americans who are experiencing the greatest cost escalation.
Everyone should pay the same price for basic health care based on the region of their residence.
We need to provide assistance to those who cannot afford to pay their cost of basic health care, but we cannot make health care free or else the demand for services will skyrocket.
The other large change that needs to be made is centralizing our purchase of medical services. Only by using large customer clout can we expect to reduce our medical costs to the level that most other industrialized countries pay.
We pay much more for pharmaceuticals, hospital visits, lab work, etc., than other countries do.
We have no hope of reining in these costs unless we negotiate purchases on a consolidated basis where we can leverage purchasing power. Last fall, Proposition 61 would have placed a ceiling on prescription drug prices equal to what the VA pays for sales to the state’s Medi-Cal program and other state-funded programs.
This would have resulted in de facto consumer economies of scale. The pharmaceutical companies spent more than $100 million to defeat the initiative in November with deceptive advertising alleging that veterans would get the short end of the stick.
Imagine how much those pharmaceutical companies will spend on lobbying if we try to consolidate our national purchases of pharmaceuticals.
If we put everyone into a single system, there will be administrative cost savings. The system needn’t be a single-payer system – instead, a sanctioned but regulated oligopoly of insurance companies can provide competition, thereby driving innovation.
Technology is going to change the way health-care services are delivered, and competition will prevent resistance to adopting this technology.
A type of system like those used in the Netherlands, Switzerland and elsewhere probably provides our best hope of balancing the quality of service with cost containment.
There are several other provisions that would be helpful to the consumer. The fees charged by out-of-network providers should be capped at some multiple of the price negotiated with insurance companies to prevent price gouging.
When consumers contact their insurance companies for assistance, they need to deal with people who are empowered to solve the problem rather than staff in an offshore call center who waste everybody’s time.
I am sure there are many more positive changes that can be implemented, but I don’t see Congress considering them.
I am concerned that, just as when the ACA was passed, special interests will take charge and the system will not meet the needs of the people. If this happens, we can ultimately look forward to a single-payer system that functions sub-optimally.
Jim de Bree is a retired CPA residing in Valencia.
