Posted on 11/30/2015 10:07:25 AM PST by Kaslin
The U.S. health care system is unsustainable but it could be dramatically improved with more efficient care of our sickest patients. Medical spending is rising at twice the rate of income growth. Medical prices are rising at three times the rate of consumer inflation.
The Affordable Care Act (ACA) was sold to the American people as a means to fix those problems and make health care affordable. The vehicle to achieve this is, implausibly, a requirement that we all purchase overpriced health insurance. In addition to stipulating the benefit package Americans are allowed to have, ACA regulations also force insurers to accept all enrollees -- including people in poor health. Moreover, the rates must reflect average health in a community rather than individuals' health status. In insurance parlance, this is what's known as guaranteed issue/community rating. The law does allow charging some people more based on their age, such as charging people in their late 50s more than the rates paid by people in their 20s. But premiums cannot be higher for enrollees with high medical bills.
How does this work in practice? For Obamacare to work, an army of young people need to willingly pay $3,000 per year in premiums, while knowing they will not even come close to reaching their $3,000 deductible. An average of about one baby is born to women sometime in their 20s. But that's about the only major expense a 20-something will incur. For their part, hoards of healthy 40-somethings need to pay $4,000 in premiums for a $4,000 deductible they will never reach; and healthy 50-somethings need to pay $5,000 in premiums for a $6,000 deductible most of whom will never surpass. Sounds like a bargain, right? To make health care "affordable," millions of Americans need to purchase coverage that pays virtually none of their medical bills. In other words, access to affordable care under Obamacare is premised on the idea of that most people necessarily must get a raw deal. That is, most people (who are healthy) must be overcharged to offset the higher costs for unhealthy enrollees, who would otherwise find their coverage unaffordable if charged premiums based on their own health risk.
Average health spending per capita in the United States is around $8,600 annually. But it's not distributed evenly. About 80 percent of the enrollees are healthy like me. We collectively consume only 20 percent of the health care dollars used; about $2,150 per year on average. However, some people are ticking time bombs. The least healthy 20 percent spend an average of about $35,000 yearly.
These are only averages, but about 10 percent of the population has health concerns accounting for 17 percent of spending. Another 5 percent have serious health concerns accounting for 16 percent of health spending expenditures. The next 4 percent consumes nearly one-quarter of health care dollars (27 percent), while the sickest 1 percent of accounts for 20 percent of spending. Think about that for a moment: the sickest 5 percent of the population consumes nearly half of all health care dollars. Many are aged seniors in their last months of life.
Obamacare purposely attempts to make health care affordable by forcing the healthy 80 percent to pay more of the costs for the unhealthy 20 percent. But that does not make care affordable; it merely shifts the costs from one party to another. We could all pay a community rated share of the nation's medical bills if everyone merely sent a check to the government for $895 a month. That is sufficient to pay an equal share of the nation's medical bills and includes an extra 20 percent so the government could contract with insurers to negotiate with hospitals, process claims and eke out a profit. But that is not likely to work since a lot of kindergarteners cannot be trusted to pay their fair share out of their lunch money.
We will never get a handle on runaway health spending until we get a handle on what to do about the 20 percent of the population that consumes 80 percent of health care dollars. We don't necessarily have to throw them under the bus, or put them on an ice floe to drift away and die of exposure. Multiple studies have found that about 30 percent of medical care is wasteful, unnecessary or possibly even harmful. If we could better manage the care provided the sickest 20 percent of the population we could possibly reduce expenditures by one-quarter or more.
The perverse way Obamacare attempts to make health care affordable is both ineffective and unconscionable. Moreover, it will do nothing to reduce the rising cost of health care. Rather than disrupt the lives of the 80 percent by overcharging them to finance our unsustainable health care system, why not improve the way medical care is provided the sickest 20 percent of Americans?
To the people who supported it — This is your baby, you wanted it, now pay up.
Forcing health insurance companies to cover those already ill is like forcing car insurance companies to repair cars for drivers with no insurance after they have a wreck.
Anyone wanting single payer needs to take a look at what’s going on in the UK right now with the young doctors on strike.
They essentially did that by taxing them for not having health insurance.
Question: is it this year when the full penalty kicks in or next year? Either way, this year's penalty will be significant and, we hope, very painful.
2% of income or $325 per adult and $165(max of $975) per child whichever is greater.
It goes up next year to 2.5% or $695/$347(max $2,085)
All these payments without getting anything to show for them sounds a little like a tax. It's a healthcare "infrastructure" tax, that's what it is!
Thanks!
That is a lot of cash for many people especially when they are expecting a refund and they get nothing. Should be interesting.
Lets hope that the Republicans are smart and blame Democrats. However, I’d expect the Democrats to try to do something. After all, the timing is bad for them.
If you write Uncle Sam a check, just don’t pay it.
My sister is pissed off hot about this, She uses Uncle Sam as her savings account and he is charging her $440 in interest this year to hold her money.
I recommend paying Uncle Sam
so you won’t hear a cell door slam.
Exactly
If one looks into socialized medicine they will find that every country has strict price controls. Doctor’s pay is capped as well as nurses, prescription drugs costs are controlled. There is also rationing of services. Most countries with socialized healthcare outlaw or severely limit private medicine practice.
I don’t see that happening in the U.S. unless the constitution is amended.
The shifting of costs from the healthy who don’t need it, those who pay to those who don’t pay, and the young to everyone, is the groundwork for socialised “healthcare”, just as we suspected all along.
Any health insurance company needs payers who don’t eat up services to remain profitable. It’s the core concept of the business model.
You are exactly right it IS a tax, and that is how the ACA was upheld by the SCOTUS: a tax.
That lie worked great in the 2014 election.
I'm not up to date on that specific issue anymore.
But - as originally written - the “fine” was unenforceable unless you had a tax refund due, which included the Earned Income Tax Credit welfare payment.
The original law stated that the IRS had no authority to file a criminal or civil lawsuit to collect unpaid ObamaCare premiums.
There was one unresolved issue at that time about whether the IRS could - or could not - file a delinquent payment notice with the national credit agencies.
Obviously, that might be quite harmful to people seeking credit or applying for jobs that require a credit check.
I don't know if that issue has been resolved or not.
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