My wife is a doctor in a specialty with a lot of subspecialties. In order to ensure that the contracted hospitals receive complete subspecialty coverage every day of the year, vacations are chosen using “pods” of doctors with similar skills, and selections are made six months at a time. My wife is a nice person, and when the other doctors in her pod requested to reserve several of the most popular vacation weeks, she agreed and took the leftovers. So now, we’re not traveling during our preferred times, but rather during times that interfere with other obligations. I’m going to miss our church’s annual meeting and I’m the new treasurer, plus I will not be able to volunteer as a camp counselor in June. I can’t really complain, however – I will be on vacation after all.
You may wonder what this has to do with healthcare in the U.S. Part of me wanted to say, “They can’t do that. They can’t reserve the best vacation weeks. Say ‘No,’ even though we don’t have anything scheduled.” She didn’t – she’s a nice person, as I’ve said. So now, I’m hoping that we get the choice vacation picks for the second half of 2017, because my wife made the sacrifice for the first half.
Similarly, healthcare is a means for a potential reward for the Democratic Party in 2020. Since its inception, the Affordable Care Act (ACA) has been the target of republicans, and President-elect Trump campaigned on its repeal and replacement. Trump’s plan is not yet very detailed, but that released by House Republicans in June can give us an idea of what may be coming.
Both the House Republicans and Mr. Trump have said that they want to keep two of the most popular options: insurance companies will not be allowed to deny coverage based on pre-existing medical conditions and children will be eligible to remain on their parents’ plans through the age of 26. Both are expensive provisions for insurance companies as they guarantee insurance companies cover more sick and fewer healthy people.
Should President Trump and the republican controlled Congress decide to weaken the ACA, 16-20 million Americans will lose their health insurance coverage. Their big idea to reduce costs is to allow insurance companies to sell across state lines, but I doubt this will make much of a difference to most people. In rural areas, there are likely to be many – sometimes hundreds – of miles between hospital systems. Those hospitals have little incentive to negotiate low prices for patients covered by insurance companies because they don’t have competition. If you increase competition from two to five insurance companies within that rural area, it shouldn’t make a difference because there is still little incentive for the single hospital in 300 square miles to negotiate lower prices. Competition between insurance companies isn’t the issue.
Urban areas already have plenty of competition because there are so many more potential customers. The highest insurance premium increases for 2017 occurred in the rural areas, not the urban ones. There was still a substantial premium increase overall because fewer healthy people have chosen to obtain coverage than the insurance companies originally anticipated. Keep in mind that the average annual increase is significantly lower during the Affordable Care Act era than it was for the prior decade.
Competition between medical providers doesn’t work as you would expect from a supply and demand relationship either. Studies have shown that when the number of ophthalmologists in a given area increases, the eligibility requirements for Lasik surgery decrease. People with much better eyesight have surgery in order to avoid occasional eyeglass use when another eye doctor moves to town. The market solution does not necessarily work in the medical field.
The Affordable Care Act is actually a good start toward universal health insurance coverage in the United States. I doubt there has ever been a major program implemented in any large country which has worked completely as intended from the beginning. They all need to be tweaked. Social Security, for example, began with a much lower contribution rate than exists today. It required tweaking because of changes in life expectancy and the ratio of retired to working individuals.
An NPR story a few days ago highlighted how people feel in coal country – in this case, Uniontown, PA. One woman said that she hopes President Trump will quickly repeal Obamacare when he takes office because it is ridiculous how much her daughter pays for health insurance. This was not addressed in the story, but a repeal would most probably mean that her daughter would either have a much higher premium and/or deductible, or would lose her insurance altogether. Insurance companies have a mission to make money – even the nonprofits – and they can make the most money if they cover fewer high cost users of medical services. Women and children use more medical services than men.
So we have a situation in which republicans have to try and make good on their pledge to repeal Obamacare, or risk losing their next reelection bids. We have a president-to-be who has also promised repeal. The replacement plans include provisions to make insurance more expensive, less available and to privatize Medicaid, although not labeled as such (“Empowering States and Increasing Flexibility”). Since Medicaid’s administrative costs are about half those of private sector insurers, many people will lose coverage under a privatization plan. Finally, the likely income tax cuts for high income individuals will significantly reduce federal revenue, and in order to slow a ballooning federal deficit, Medicare and Medicaid payments will probably be among the programs cut.
(There’s good research that shows tax cuts for the top 10% earners do not stimulate the economy in the two years following the cut. Long term investment could be helped by such a cut, but every economic organization that has evaluated Mr. Trump’s tax plan concluded it would cause a recession, so long term investment is unlikely.)
So all democrats have to do is nothing. If they let the republicans enact their tax and healthcare plans, tens of millions will lose their health insurance and the country will fall into recession. With such a situation leading up to the 2020 election, they are certain to retake the presidency and Senate, and possibly the House.
But it would be devastating for the American people, and the democrats should not allow it to happen.
Democrats should work with the republicans to craft an improvement to the Affordable Care Act that will be the next step toward universal quality healthcare. It can’t be called that, of course, but the ACA is actually a good starting point. The republicans will have to make it look like a repeal and replacement. They have already laid the groundwork to keep portions of it, and that can be expanded to keep more items that work. Even if the end product is 80% of the ACA, let the republicans take credit. That is probably the best way to ensure that the “Democrats Serve The Public” bumper sticker rings true. And, it may also mean a return to bipartisan cooperation, which the last election suggests may be sorely needed.