Thursday, July 04, 2013

What should they have done?

With the latest delay in implementing ACA seeing the employer mandate pushed back a year we should start asking if there might not be a better way to accomplish the goals of ACA. As commenter Jardinero1 pointed out;

this is not the first failure of ObamaCare nor is it likely to be the last. Some failures, such as LTC insurance, were so obvious and colossal, you have to wonder if they even attempted for them to be viable.

The tough part of the question is even trying to figure out the purpose of ObamaCare in the first place. What did they really intend to accomplish with this bill?

Lower the uninsured rate - Young healthy people make up a disproportionate percentage of the uninsured. They can already buy decent polices for well under $100 per month. I don't think anyone can argue honestly that doubling or tripling the cost of a policy would get them to buy. If they wont pay $70 per month they aren't going to pay $200, even if you do tax them $95 per year.

The number of people that wanted insurance and either couldn't qualify or truly could not afford it was only four to six million. If the goal was to cover those four to six million completely overhauling systems that cover 200 million people makes no sense. What was spent in regulation cost, compliance, advertising, etc etc would have insured those  four to six million. Tweaks to Medicaid and Medicare would have accomplished that without disturbing 200 million other people.

If you want to force people to make the smart financial decision either require they carry insurance or refuse to treat those that don't. Either way keeping insurance as affordable as possible lowers the uninsured rate, using insurance as wealth redistribution only encourages people to exit the system.

Lower the cost of healthcare - An obvious non solution is a huge insurance bill. Insurance is the cost of healthcare plus administrative and risk fees. You might be able to squeeze 5% out of that additional cost but if your goal was to only reduce our healthcare cost 5% again this bill was overkill. Not only does ObamaCare not do anything to lower the cost of healthcare it has numerous provisions that have and will increase the cost of healthcare. Compliance cost being just one of them.

If you want to lower the cost of healthcare that can be done in 6 months and generate revenue for the government. Rent the Medicare network. There is roughly 100 million employees with group insurance most of whom pay a PEPM access fee of $5 to $20. Rent Medicare's network and the federal government is now making $500 million to $2 billion per month. This would also immediately accomplish most of the EDI goals of HIPAA and ACA as well. 

Redistribute wealth - If the intent was to force the haves to pay for the have notes a couple simple taxes could have accomplished that. In fact the bill contains a number of taxes to do just that, but it doesn't explain all the other changes and intrusions.

Taxes already fund Medicaid and thus redistribute wealth. Open Medicaid up to those that have catastrophic healthcare expenses and make them  pooled cost to the nation not a small group of unlucky co-workers or fellow policy holders. The poor quality of Medicaid should be enough to motivate people off of it when better options are available.

It's no wonder so many pieces of this reform are falling apart, they never made sense in the first. It is a bill of multiple actions but no solutions.

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