The Affordable Care Act was a bait and switch that won’t go away

By Jesse Harris

Raise your hand if you hate health insurance companies.

Yes, I know you just did it. So did I. We hate insurance because so much in medicine has gotten astronomically expensive without it. You can’t know how much something costs because it’s all priced to game insurance reimbursement rates. It gets more expensive every year, yet it’s always more expensive to not have it. Even without a legal mandate to buy it, there’s a practical one to.

So in marches legislation demanding that you buy this thing you need but hate. Wait, what? No, but seriously, we promise it’ll be better coverage than ever! Plus you’ll help a bunch of sick people who can’t otherwise get it. Pre-existing conditions? Those are gone too. Did I mention that it’ll actually be cheaper than what you’re paying now?

The sane person sees this and says “what the what? That sounds like a scam.” And for years, Americans did just that, watching premiums jump by double digit percentages every single year since it was passed. More things were covered, but you were paying $1000/mo and a $5000 deductible for the “benefit”, $17,000 annually before the insurer would pay a dime. It wasn’t a “get more, pay less” scenario. It was “get more, pay LOTS more” one.

Really sick people got coverage, but it was worth it to them. After all, that $17,000 was a drop in the bucket compared to how much care they were receiving. But that’s really the thing about insurance, isn’t it? If you’re receiving more benefits than you’re paying in, someone else has to cover the difference somewhere. That someone is people who are paying but not using the coverage.

The theory of how to make up this obvious cost difference was to mandate that everyone buys or pays a fine. All those healthy people not buying insurance until they needed it were called “freeloaders”, ironically at the same time as we were encouraged to feel sympathy for those with pre-existing conditions. But a funny thing happened. The healthy people looked at the cost of buying even the cheapest insurance plan that satisfied legal requirements and found that it was a lot cheaper to pay the fine of no more than $2,085. That’s where things basically collapsed, financially. Lots of people who needed more care than they were paying for signed up and rates on everyone else rose to compensate, but almost nobody signed up who would pay without being a heavy user.

Despite all of this financial hardship caused by poor foresight, a slight majority doesn’t want to give it up. The sick people who are getting more than they pay in are obvious. But everyone else? Well, they’re afraid of being one of those sick people someday. They want to keep the coverage mandates and bans on pre-existing conditions while making it cost less.

But these are the primary things that have driven the costs so high. You can’t get more services for less money. You can’t bring in a large group of heavy users and decrease costs. None of the various provisions for reducing costs have made a dent in those two heavy drivers, nor are they likely to. Many of the estimated 29M people who don’t have insurance are ones who would need to receive additional subsidies to afford it, another thing that drives costs higher.

The failures of the insurance system are obvious, separating us from the costs of medical procedures. Insurers have no motivation to look at keeping our individual long-term costs down because we might not be their customer at the drop of a job change. We jump from medical professional to medial professional as we change insurance, each one starting with a blank slate and not wanting to look at our history for fear of assuming any liability. Instead of trying to fix the obvious failures by reducing the need for market-controlling insurance, we doubled down on it.

This is, unfortunately, all by design. When insurance fails, there will not be a move to actually and finally reduce costs by eliminating the need for insurance. No, the push instead will be to dramatically increase the scope of insurance through a “single payer” system, effectively a single insurance pool run by Uncle Sam. Already around 10% of the money currently spent on medical programs like Medicare and Medicaid is lost to fraud and abuse by medical providers. We’ve heard horror stories about how poorly the VA system is being run. But this is the direction we want to take medical care?

If you’re convinced that the downsides of increased costs and politicization of the entire medical industry is worth making sure everyone has some basic level of access, then make that case. But don’t you dare lie to me again that it will be both cheaper and better in every possible way. We’ve already heard that line.

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