Why Obamacare Fails and What We Can Do Instead
Trump said it: Obamacare sucks! The press was quick to pounce, coming to the defense of the ACA, much as they have for Bidenomics despite evidence to the contrary. Unfortunately, the American people know all too well that they now need $11,400 more to maintain their standard of living, as healthcare insurance premiums continue to increase. Even with inflation higher than we have seen in decades due to Bidenomics, family insurance premiums have outpaced inflation over the last ten years with the average family premium increasing 47% since 2013.
Sky-high inflation and premiums are hurting all Americans, and those increases in premiums hurt even more as they crowd out day to day spending needs. The idea behind the ACA was that providing healthcare insurance would lead to improved access. This has not proven to be the case. Ten years later access is decreasing, not increasing, and those in the Beltway bubble seem to be figuring out what hard-working Americans already know: Obamacare doesn’t work.
The ACA has also caused a massive consolidation of insurance companies and hospitals and services within healthcare systems, leaving patients lost and confused. Namely in the rush to consolidate services, there has been a loss of rural hospitals. Many rural hospitals have closed due to financial pressure, leaving residents without access to essential medical services. Rural hospitals cannot keep up with all the mandates from the Affordable Care Act. As a result many small communities are losing access to care, as well as their largest employer.
In addition, the administrative burdens and regulations imposed by Obamacare have discouraged many physicians from creating independent practices, thus leading to more physicians seeking employment within hospital systems. The COVID pandemic only exacerbated the problem. In 2014, the AMA stated that only 8% of physicians were working directly for a hospital, but now that number is up to 74%. Yet all this integration hasn’t helped access to care.
The left’s refutation to any criticism of the ACA is, "You don't have a plan." But addressing the flaws of the ACA doesn’t require a 1,000-page bill, as its creation did. Change can be made piecemeal. There have been incremental healthcare bills introduced like the Fair Care Act and the Healthcare Fairness for All Act. Indeed, it will take several bills and regulatory changes to begin to mend what Obamacare broke.
Instead of a one-size-fits-all approach, those in Congress and policymakers should first focus on what makes our healthcare system great: that it is highly individualized and customizable. At the same time we must have healthcare insurance reform that ensures access while also controlling costs. Economic incentives should be aligned to maximize savings when patients are in control of their healthcare dollars.
Additionally, price transparency is working. CMS just further refined the rules concerning price transparency. Furthering transparency in healthcare pricing would empower individuals to make informed decisions about their care while encouraging competition among providers. With transparency of prices and incentives to increase utilization of Health Savings Accounts (HSAs), healthcare spending will decrease and allow for that highly customizable flexible insurance plan. High deductible plans have been shown to decrease healthcare spending as shown by an extensive RAND analysis. HSAs would give individuals the same tax benefits as employers and allow them to keep their money. An additional incentive for the individual to not spend all their money in a year is that it would still be theirs at the end of the year and grow over time. Traditional high deductible plans have no rollover for being frugal with your own healthcare dollars.
Policymakers could add subsidies to HSAs for low-income individuals at a fraction of the rate at which it subsidizes care through Medicaid or the ACA exchange. They can also provide tax breaks to employers to incentivize contributions to their employees’ HSAs. Placing individuals in control of their healthcare dollars promotes cost-consciousness and responsible consumer behavior.
What about Medicaid expansion? Since the implementation of the ACA, forty states have expanded Medicaid. Maintaining the expansion while adding work requirements for able-body recipients would prioritize care for our vulnerable populations while still incentivizing participation in the workforce.
Medicaid programs are customizable at the state level and lend themselves to model experimentation. States should be incentivized to create programs that give low-income families control over some of their healthcare spending. Several states have used waivers within Medicaid to improve access to care and quality while cutting spending. Singapore, which has a population equal to or greater than 26 states, offers a good model for how to utilize HSAs with safety net programs and should be modeled as Congress looks to optimize health insurance coverage for those most in need.
The Affordable Care Act has failed to deliver on its promises. It's time to acknowledge its shortcomings and move towards a healthcare system that empowers individuals, promotes price transparency, and incentivizes responsible behavior. Healthcare insurance reform that works for the working men and women of America will require bold action from Congress. By prioritizing the needs of the American people, we can create a healthcare system that is accessible, affordable, and effective for all.
Chad Mathis is Associate Chief Medical Officer at UofL Health and former senior policy advisor, U.S. Department of Health and Human Services.
