I had to laugh at the headline in last week’s New York Times’ business section that read, “Health Care Spending’s Recent Surge Stirs Unease.” The article describes the concern among independent observers regarding the ultimate impact that the Affordable Care Act (Obamacare) will have on health care costs. It may turn out, claim the observers, that the cost of health insurance will actually increase over time as the total effect of Obamacare takes hold.
Of course, such a result would be a disaster for the president’s legacy, not to mention for his party’s standing with the American people. Obamacare was sold to the public as a way to provide health care insurance to the millions who have not been covered in the past and for several things it guarantees (principally coverage for pre-existing conditions and coverage for young adults on their parents’ plan). And the main point that won over skeptics was that it was a sure-fire way to stall the rapid increase in health care costs.
But if the administration was really serious about cutting the cost of health care, Obamacare wasn’t the plan to do it because only a government-controlled plan can accomplish that result, and for all that the Affordable Care Act is, it most definitely is not a government-controlled plan for the delivery of universal health care. Instead, it’s a plan that requires for-profit insurance companies to provide insurance to everyone (the very sick and the very old along with everyone else).
The idea is that if everyone buys private health insurance (everyone here meaning the very healthy young as well as the rest of the population), the premiums companies will need to charge will be lower than they would otherwise be because, in effect, the young would be paying to cover the old and the very sick.
It’s a nice idea in an all-for-one, one-for-all kind of way (assuming you find that kind of approach consistent with your philosophical/sociological view of what’s best for society) if it can produce the desired result of lowered premiums and, thereby, lower health care costs.
Ah, but there’s a problem with the plan: Many young people aren’t buying it. And if the healthy don’t buy in, the insurance companies are going to set the rates for insurance at higher levels (to cover the higher costs of treatment for the very sick and very old whom they are required to cover). And why shouldn’t they do just that? They are for-profit companies that are in business to make money for their shareholders by providing a service to their customers. And isn’t that the way for-profits are supposed to operate in a capitalistic economy?
Okay, so let me make a couple of tangential points here before I get back to my thesis.
First, Obamacare is not socialism. It’s a form of regulated capitalism, as is just about everything that exists in our economy. We don’t have government ownership of enterprise. That’s socialism. We do have a regulated economy that imposes requirements on anyone or any entity that seeks to do business in it. The health insurance industry is more regulated under Obamacare than it was before that act became the law of the land, but it is still a for-profit industry that is free to make a buck and is largely unfettered in its ability to do so (principally by setting rates for the insured it covers).
Second, Obama opted out of a socialist approach to universal health care almost immediately on taking office when he took a single-payer system off the table before a bill encompassing that approach could even be introduced. In a single-payer system, the government would supplant the for-profit insurance companies and, essentially, run the country’s health care system. That’s pretty much what Medicare is. Under Medicare, health care providers (i.e., doctors and hospitals) get paid for services performed under government-established rates. And they can’t charge more for those services than the government will allow. Thus, the elderly in our country are provided basic health care by the government, which collects taxes from everyone for the provision of that entitlement to the elderly.
A universal single-payer plan would have eliminated the need for private health care insurance companies. It would have taken the profit out of the business of providing health care insurance to everyone in the country. It would have set payments for services rendered and imposed limits on what services could be provided and otherwise bureaucratized the business of health care in the United States. It would, in that sense, have established “death panels” (a politicized euphemism to connote bureaucrats who would decide when a medical service was warranted and when one wasn’t). Of course, insurance companies have their own “death panels” in the form of self-regulated policies that determine what medical procedures will be covered and what procedures won’t be. Obama, notwithstanding the claims from the political right that he is a socialist, opted not to push for such a single-payer plan. Instead, he went for a “half-loaf” solution: the regulated-capitalism approach that Obamacare encapsulates.
Now, back to my point. In the long run the real concern about health care costs has relatively little to do with the effect of Obamacare. Yes, there could have been savings in a single-payer plan, but if such a plan could never have gained Congressional approval (as appeared from the outset to be the case, what with an intransigent Republican opposition that would have cowered enough Democrats away from supporting one), Obama may have been right in concluding that half a loaf was better than none. In any event, the real cause of increased health care costs, in the long run, isn’t going to be insurance companies that tack on their ten (or fifteen or twenty-five) percent markup to secure their profits.
The real cause of increased health care costs is going to be science, as in the scientific breakthroughs that will become increasingly available to extend life and to cure diseases. Think about heart disease, for example. Fifty years ago, people with advanced heart disease had no option in terms of health care. In essence, they had a death sentence. Now those same people have open heart surgery and heart transplants readily available to extend their lives (if not cure their diseases). Those medical advances are great, but they cost a lot of money
Similarly, many cancers are now capable of being fought successfully, if not fully cured, thereby extending the lives of those afflicted. And those treatments/cures are also expensive. And so are other diseases, previously life-threatening or severely disabling, either currently susceptible of expensive cures or soon to be so.
These life-extending and life-appreciation-enhancing medical procedures are only going to become more prevalent as science marches on. And would we want it otherwise? Certainly not. We all want to live as long and as productively as possible.
So, as the right and left make their political arguments about the pros and cons of Obamacare and on whether it is cutting health care costs or adding to them, bear this thought in mind. One way or another, we’re going to pay more for the cost of our health care. There’s just no getting around it in either a capitalist or a socialist model.