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HEALTHCARE REFORM


America’s first attempt at health care reform can be declared as an overall failure. Despite providing some with access to health insurance, the impacted population is largely unchanged and all saw cost increase with quality of coverage. In addition, the economic impact of the health care package was negative, harming employment and reducing choice. As America transition into a new political era, the hope for fixing the disastrous program is proving to be a larger challenge for politician opposing the unpopular legislation.

The impetus for enacting health care reform was the level of uninsured Americans left in the wake of the financial crisis. In the United States, majority of people gained health insurance through their employers. As one would expect in high unemployment, people would lose coverage without a job. Given the political wave towards progressive liberalism, the elected officials, led by President Obama, decided to enact legislation that expanded government’s role in expanding health coverage.

The Affordable Care Act, affectionately dubbed ObamaCare, basically involved expanding health insurance coverage through creation of state health exchanges offering individual plans and requiring all Americans to have coverage, facing stiff penalties if found otherwise. In addition, the legislation determined what needed to be covered, regardless of actual impact on health. The idea was that all people would bear responsibility for the cost of health care, with redistribution covering the additional cost of those that use health care more. Proponents of the change promised the public would not see any drastic change.

ObamaCare proved to be neither affordable nor effective. For many, they saw premiums drastically increase year to year and quality of coverage decrease, as health insurers balanced the increased cost of the legislation. In response, many health insurers provided high deductible plans, which made consumers not only pay premiums, but the full cost of health care until meeting the high deductible. Unfortunately, not all health-related purchases would qualify for meeting those deductibles. Also, many people defiantly refused to obtain coverage, especially younger Americans that did not see a reason to.

Not only did the unpopular legislation negatively impact consumers and employers, it also negatively impacted health providers, sparking hospital consolidation that continues to this day, as providers seek scale and profitability. As a result, consumers also lost choice in providers, which harms outcomes. In certain markets, single health care organizations control the entire market, which will lead to higher prices and less choice.

The big question is what different could they have done? If most people get their insurance from employment, the obvious solution would be to focus on employment and moving the unemployed back into the market. For issues like extending pre-existing condition protection, policymakers could have enacted limited legislation to protect impacted population, like many states already did. Also, eliminating barriers that inflate pricing in certain markets would reduce cost.

Another question for policymakers is what to do now that our first attempt made a challenging situation worse. Much of what was proposed in repeal efforts nibbled at the problem but did not fully address the problem. Many of the principles reduced the burden of the program and removed unpopular mandates. But, the focus should be implementing reforms that actually reduce the cost of health coverage, improve quality of available plans, and expand competition.

There is no easy solution for either the GOP or the Democrats, but the status quo does not help anyone. Many want a complete repeal, some want to repeal and replace, and others protect the status quo to serve the legacy of the past. But, change is needed. Many state markets are ready to collapse or already collapsed. Much of the public funds tied into the program could better serve our education system, infrastructure, or veteran services. Taking the politics out of the equation is needed realize the economic impact of the issue is more important than the legacy of the person that created the mess.

Although many want a complete repeal, the more appropriate solution is revising it to make some areas workable. There is agreement in protecting pre-existing condition coverage, eliminating medical device tax, and other areas. Now, that the individual mandate is no longer in place, both parties need to compromise and work on a replacement solution. Continued failure is neither good policy nor is it good politics.

Americans need federal policymakers to give health care reform another shot. The first attempt was detrimental failure that needs to be corrected. Although the issue is divisive and sensitive, politicians need to set aside appeasing certain far right and far left members of their base and think of the majority in the middle that need the issue resolved. Or we all can wait until Amazon, Walmart, and other private institution to complete their efforts to fix the problem. Business does a far better job than government in improving the world.