Friday, June 23, 2017
The American Health Care Act - The Scam Continues
With all of the secrecy surrounding the American Health Care Act the public is being inundated with the usual health care statistics but nothing about the alternative - single payer. The public is led to believe that first Democrats and now Republicans have the solution to what is essentially an unsustainable health care plan. A neutral observer doesn't have to stand too far back to realize that designing a useful bill with a basic goal of providing universal health care by appeasing various special interest groups will produce a messy and extremely inefficient product. It is also likely that the goal of universal health care will not be achieved. There are just too many special interests standing in the way, trying to preserve their jobs, or trying to make money.
Looking at the Congressional Budget Office graphic at the top of this page illustrates how this plays out in the current bill. From the top there is $834 billion taken out of Medicaid, the federal program designed to assist the poorest of Americans. Many of my patients were on Medicaid and the benefits were not great by any means. Most strikingly was the idea that if a person on Medicaid takes expensive medications they need to "spend down" or pay out of pocket for the drug even if their income is near the poverty level. That typically leaves them with a few hundred dollars a month to live on after they pay rent. Taking more money out of that system covers less people with this bare bones coverage and shifts more of the cost to the states. Since states do not currently step up and provide enough funding for reasonable health care at times - it is very unlikely that they are coming up with billions of dollar to make up from any shortage from Washington. Most do an inadequate job right now before this change.
There are philosophical dimensions to the Medicaid debate that are not apparent from the CBO analysis. Medicaid covers 69 million lower income people. The expansion under the PPACA (Obamacare) was up to 14 million people mostly single adults at or below the poverty line. Many are working at low wage jobs. I heard a recent story of a man working full time for $9/hr and this expansion allowed him to finally get medical treatment and ongoing care. The political philosophy involved those who believe that able bodied people should work and buy their own insurance versus those who realize that working in the USA today does not assure enough money to do much of anything including insuring themselves.
At the level of tax credits, the new Senate bill apparently leaves PPACA tax credits in place but they are worth less. There will be an adjustment for location and that typically means more politics. The whole idea behind tax credits was that insurance will be more affordable - so by definition the "savings" of $276 billion means that fewer people will be able to afford health insurance or they will need to be focused on catastrophic coverage or high-deductible plans.
Let me stop right there for a minute. High deductible plans and health savings accounts (HSAs) are frequent talking points of the free market advocates for health insurance. There is very little discussion of the fact that there is no free market in American health care. Congress has essentially invented a market and loaded so much nonsense into the market that it has ballooned into over $3.2 trillion dollars. More importantly it is a recipe for the transfer of wealth from every American into a few health care and pharmaceutical companies. Politicians will talk about expenses in terms of hospitals, physicians, and drug costs but nobody is honest about the fact that all of the money is funneled into a few companies who own all of the hospitals, clinics, and doctors. Practically every piece of health care legislation is written to concentrate power into this handful of companies. In the 30 years this system has been in place - health care administrators have increased over 3,000% and we keep hearing that they cannot contain the cost of the system. How could they? They are the cost of the system. So if somebody suggests that health care is a free market tell them how it really is. The American health care system is set up to transfer as much of the wealth from the average citizen that it can under the constant threat of medical bankruptcy. High deductible plans and HSAs are just more convenient ways to do that.
The cost increases from the CBO graphic are basically delays, decreases, or stopping taxes associated with the PPACA. Some grants will apparently be available for a minor cost offset of health care costs. The net savings according to the graphic is $119 billion spread out over 2017-2026. The loss of coverage as estimated by the CBO and the Joint Committee on Taxation (JCT):
"CBO and JCT estimate that, in 2018, 14 million more people would be uninsured under H.R. 1628 than under current law. The increase in the number of uninsured people relative to the number projected under current law would reach 19 million in 2020 and 23 million in 2026. In 2026, an estimated 51 million people under age 65 would be uninsured, compared with 28 million who would lack insurance that year under current law. Under the legislation, a few million of those people would use tax credits to purchase policies that would not cover major medical risks." p. 4.
A second consequence of the current bill is to allow waivers on a state by state basis for essential health benefits (EHBs) and waivers to allow companies to charge greater premiums based on health status unless continuous coverage can be demonstrated. The EHB is the minimum benefit set that health insurers in any state need to provide. Mental health coverage and maternity benefits are seen as the likely casualties of modified benefit sets.
"CBO and JCT expect that, as a consequence, the waivers in those states would have another effect: Community-rated premiums would rise over time, and people who are less healthy (including those with preexisting or newly acquired medical conditions) would ultimately be unable to purchase comprehensive nongroup health insurance at premiums comparable to those under current law, if they could purchase it at all—despite the additional funding that would be available under H.R. 1628 to help reduce premiums."
People with the highest health care costs would be unable to purchase coverage. Comprehensive coverage in many states will not contain mental health benefits. That will undoubtedly include assessment and treatment costs for substance use disorders during an ongoing opioid epidemic.
Himmelstein and Woolhandler have a recent publication (2) that looks at the lives lost if the PPACA is repealed in 2018 (14,528-60,000) or 2019 (22,599-93,333) and the number saved (20,984-86,667) if the transition to single-payer occurs 2018.
These glaring deficiencies in the AHCA as it stands are in both the House and Senate version and are a great example of how political biases fail to protect the majority of Americans. For those Americans who are currently protected, health care in America is designed to transfer as much money as possible into the hands of a few large health care companies and pharmaceutical companies. It has also become a jobs program for a massive influx of middle managers who have added neither value or efficiency to health care delivery. How could they - they know nothing about health care? Their job is to make money from a system that is for the most part not designed to make money.
The answer to the problems with the current bill does not lie in either major party or their special interest legislature. The answer lies in a single payer healthcare system, that will provide a uniform EHB that covers psychiatric, addiction, and maternal care. That answer lies in universal access to all Americans. The answer lies in getting rid of all of the unnecessary bureaucrats and getting them jobs somewhere else.
The healthcare priority right now is to come up with a system of care that will not transfer trillions of dollars from Americans to companies providing expensive low quality service. All Americans need to know that we can get the next most expensive system in the world for about $1 trillion per year less and with it nobody has to worry about medical bankruptcy.
George Dawson, MD, DFAPA
1. Congressional Budget Office. H.R. 1628, American Health Care Act of 2017. Graphic at the top of this post is from this document and is assumed to be public domain.
2. Himmelstein DU, Woolhandler S. Trumpcare or Transformation. Am J PublicHealth. 2017 May;107(5):660-661. doi: 10.2105/AJPH.2017.303729. Epub 2017 Mar 21.PubMed PMID: 28323461.
Minnesota Medical Assistance is Minnesota's Medicaid Program. It covers 700,000 low income Minnesotans. The total population of Minnesota is 5.49 million.