Elections have consequences. Even though 80% of Americans like their current health insurance as provided by their companies, President Obama and his fellow Democrats approved the “Patient Protection and Affordable Health Care Act” on March 24, 2010.
This debate has been called Health Care Reform but it more accurate to say it’s Health Insurance Reform. It will radically change the way employees receive health care coverage in the U.S., opening eligibility to more than 32 additional Americans.
It’s said that people don’t fear change ? they fear uncertainty. The debate over Health Care Reform has raged for more than a year, mostly about uncertainty. People accept that change must take place because health costs are growing at double-digit rates. But they don’t like the idea they may have to pay more money for health insurance, or to wait long periods of time for doctor appointments or treatment, or to pay more taxes for others to have health coverage. They were also concerned about increasing government control in this area. Insurance companies can be difficult to deal with, but the government is impossible.
Perhaps the biggest break President Obama received was news from California in February, 2010 about an insurance company called Anthem- Blue Cross. As was noted in a New York Times article “Health Vote Caps a Journey Back from the Brink” (3/20/10),
Anthem announced to its customers its plan to increase health premiums by 39% (!) effective March 1st.
Now Mr. Obama had the argument he needed to overcome peoples’ doubts about his Health Reform idea. The cost of providing the current system of health care was costing a lot more than people imagined. While most employees were still paying only 15% of the total cost of premiums, that can’t be sustainable if overall insurance costs to their employers are rising at 30-40% each year. Even though employees like their current system, it’s only a matter of time before companies simply can’t afford to provide the same care without transferring a lot of the cost to the employees through higher premiums or cost share.
One other issue helped the President ? the current recession. Many people feel that President Obama should spend most of his time creating jobs and growing the economy, but he seems to be spending most of his time on Health Care Reform. But that has helped the President’s case for Health Reform. Because the unemployment rate has not improved beyond 9.7%, people feel the threat of unemployment every day. That fear was used to create more public support for the new Health Reform bill because the new system will offer guaranteed health coverage to people without jobs.
It’s difficult to determine now the ultimate success of this Health Care Reform ‘victory’ for the future of the U.S. According to the “Iron Triangle” theory, there are 3 elements of health care that are interdependent ? Cost, Accessibility and Quality. If you alter one of these elements, the other 2 suffer. Increasing accessibility to 32 new Americans should definitely increase overall health care costs in the U.S. and lead to a decrease in quality ? fewer doctor choices, longer waits, etc. Even the government predicts that government spending in this area will increase by $1 trillion over the next 10 years. Since the government has a record of underestimating future costs, the additional cost will be probably $2-3 trillion.
It’s nice to know that people won’t be denied coverage due to pre-existing conditions, or that children can remain on their parents’ health coverage until age 26. It’s also nice to know that people will be required to purchase insurance beginning in 2014 and more people will be able to buy insurance if they lose their jobs.
But the Obama Health Reform bill failed to address the key problem with the future of health care in the U.S. ? how do you control costs? Whether companies pay for health care or the people themselves or the government, costs will continue to rise unless radical measures are taken to impact costs. The Republicans offered 2 ideas that were ignored ?Putting a limit on malpractice claims and allowing insurance companies to operate On a national level instead of applying for state-by-state licenses. Both measures would allow competition to play in role in controlling costs, much like the cell phone and LCD t.v. industries were forced to reduce costs to compete and survive. But Democrats Are supported by trial lawyers and unions, so both ideas were doomed to failure. Trial lawyers make most of their money on malpractice lawsuits, and unions represent many of the state employees who oversee state licensing and health insurance oversight.
Premiums should continue to rise after Health Care Reform, with companies making tough decisions on transferring costs to employees or limiting coverage. Taxes will rise As the government incurs larger deficits relating to its commitments. Employees will pay higher taxes ? the first clear sign of this is the requirement to report the value of health insurance for employees on their W-2 tax forms beginning 2010.
The first survey on American sentiment about Health Care Reform will be the November 2010 elections. If the 80% of Americans who are satisfied with their health care see Large premium increases or decreases in health care quality, they may use their votes to try to overturn Health Reform and vote against Democrats. If unemployment remains high, they may feel the fear of job loss outweighs the future high costs of Reform and vote against the Republicans.
In either event, the subject of health care reform will remain controversial and costly for many years to come. Companies operating in the U.S. will see the beginning of a shift to government provided health care along with tax increases long into the future.