The subtitle is Healthcare Solutions for America and the author is John Goodman (2015). It represents a super-slimmed down version of the author’s earlier book, with some updates to reflect upon the few years since the Affordable Care Act became a reality. His overall view, that the policy regime is terribly flawed, has not changed. Mostly because the anticipated problems were not misdiagnosed or just simply outgrown.
The place to start is that there is a difference between health insurance and actual health care. While the demand for coverage may exist, the supply is not going to increase in tandem unless incentives exist. That alone puts upward pressure on pricing. But, add to that, the government subsidies are capped to grow with GDP, while the actual anticipated costs of healthcare are expected to grow at nearly twice that rate. Over time, the burden shifts to ordinary citizens, making it very expensive.
In addition, when one looks at the quality of insurance that can be purchased through the health care exchanges, what the new cohort of insured will get largely resembles Medicaid or Medicaid Plus. But, recent studies have shown that there are no differences in outcomes for those covered by Medicaid versus the uninsured who simply show up at an emergency room. The mandate, though, means more people will sign up, and that largely means demand will grow from the newly insured, but not necessarily the quality that they will be getting.
As far as the impact on employment, it should shock no one that there is far greater job growth for part-timers over full-timers since ACA implementation, mostly because of the rules around workers who are above or below 30 hours per week having to be covered by employers. Moreover, the ACA also impacts businesses above a certain number of employees, and will aggregate several different businesses for purposes of a head count where there is a common owner – talk about dis-incentivizing entrepreneurs. All of these phenomena were corroborated by surveys conducted by regional Fed banks of the businesses within their jurisdictions.
The requirements around community rating also impact the quality of health plans. Specifically, because the government does not allow insurance companies to underwrite for actuarial risk in the plans that they can offer on the exchanges, they have no choice but to create plans that attract the healthy over the sick, whether through a narrow network of doctors included, or simply making the costs of non-discretionary health measures higher (meaning the healthy are less sensitive than the sick to the potential economic costs). So, yes, people may tout that premiums are lower, but that’s in large part because plans are skimpy.
Goodman continues to believe that a more market-based and transparent approach to the pricing of health care would be a major step in improving it. He is also a big believer in tax credits and portability.
Anyway, the problems are what they are. We will see what El Presidente does in his effort to overhaul and repeal.
