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HEALTHCARE REFORM


THE CRC REVIEW

America’s first attempt at health care reform was largely an overall failure. Despite providing some with access to health insurance, the impacted population is largely unchanged, and all saw a healthy cost increase with a decrease in quality of coverage. Additionally, 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 a politician opposing the unpopular legislation. Hopefully, political courage can help solve our past missteps.

The impetus for enacting health care reform was the level of uninsured Americans in the wake of the financial crisis. In the United States, the majority of people attain their health insurance through their employers. High prolonged unemployment leaves people without health insurance from their past employer and on the government's plan until their benefits run out.  Given the left-wing surge, President Barack Obama enacted legislation expanding government's place in  the health insurance market. An entity without a proven track record in making anything affordable. 

The Affordable Care Act, affectionately dubbed ObamaCare, sought to expand health insurance coverage primarily through the creation of state health exchanges offering individual plans with greater standardization and coverage requirements. Moreover, the law required employers to pay for health insurance for all employers or facilitate transfer to state pools. There was a highly controversial requirement that all Americans attain health insurance or face stiff penalties. The idea was that all people bore the responsibility of the cost of health coverage, whether they created the cost or not. Despite many knowing otherwise, policymakers at the time promised a seamless transition.  

ObamaCare proved to be neither affordable nor effective. Many saw their premiums drastically increase and quality of coverage decrease year over year. Furthermore, health insurers responded to the legislation by altering the structure of the products sold. Many health insurers replaced traditional plans with 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.

Many consumers, especially younger unemployed people, chose not to purchase insurance,  defying the mandate. The lack of employment opportunity prevented these individuals from having the income to cover the penalty as well. The legislation was unpopular and ineffective at its aim at bringing the number of uncovered citizens to zero. The harm to the health insurance market, consumers, and access to quality care did not justify the bloated financial impact to the federal treasury. Less choice and higher prices is never a desired outcome.  

In other areas of society, the failure to properly secure insurance can be remedied by making the person accept the personal cost of their poor decision. Preventing a person from accessing the care they need because of unreasonable avoidance of purchasing insurance is not compassionate. There needs to be some level of personal incentives to encourage people to add health insurance as a critical cog of their financial planning. There needs to be some focus on reducing the cost of insurance plans.

There are two separate issues that are commonly intertwined. The quality of care from our public and private health care providers. Also, how Americans pay for the care received from those providers. The quality issue is not really a direct problem, as our system continue to provide best in the world care and help expand available treatments. The issue is how to get people to not become free riders at the same time providing affordable plans that meet potential needs.

The new plans which allows people to purchase less stringent coverage for much cheaper is a step in the right direction. The only issue is coverage for catastrophic situations may be needed. That could be solved with a bit of innovative thinking. Consider allowing people to earn credit for certain coverages by actions or behaviors like stop smoking or fitness declarations in annual physical. Create a market where people can enter with a reasonable fee and affordably grow their plan with actions and behaviors in addition to sound financial choices.

The public policy solution to resolve health insurance coverage centers around expanding employment, which is the obvious answer then and now. Policymakers should allow plans to become more portable, reducing state barriers that allow providers arbitrage opportunities. Reduce competition barriers that help drive down pricing. Also, consider how health care cost are generated, allowing for payers and providers to eliminate cost that does not add value to care.

There is no easy solution for either the GOP or the Democrats, but the status quo does not help anyone. Some hope for a full and complete repeal. Others hope for a complete nationalization of the health care system, despite evidence that is not the best path. The politicization of issue needs to decrease so the economic rational solutions can make their way to the forefront. Access to quality health care is an important social goal that can be done right.