Ignoring the great Democrat (government control) versus Republican (free market) debate, it occurs to me that there are probably some pretty good intentions here.
- Everybody has to be insured, which should keep people from showing up at the doctor's office or hospital without any means of paying their bills.
- Pre-existing conditions are covered, which means you don't become un-insurable if you lose your job or get too sick to work.
- Everybody can get insurance - from the corporate CEO to the lawn-care guy. Even if you're unemployed. The government will help you pay for it if you can't afford it.
Those are generally expected to be good things. But, the Law of Unintended Consequences tells us that the more things you change, the worse the result will be.
In the past, uninsured folks simply showed up for health care when they were sick. The medical providers treated everyone, and knew that some percentage of their services would never be paid. These noncollectable debts could be written off as a business expense, reducing taxes paid. And, the providers raised their rates to cover those lost debts.
The result was that everyone paid a little bit more to cover those uncollected debts.
If everyone had insurance, this shouldn't happen, right? The providers would always get paid by the insurance companies. Therefore, it should eliminate uncollected debts, and reduce the overall cost of health care.
Or, at least that was the argument.
But, the ACA extends health care plans to cover a lot of additional services, as well as pre-existing conditions. The insurance companies think that will cost more money. So, everyone's rate goes up instead of down.
There's a lot of yelling right now about these additional services. I heard a young fellow griping on TV about how he shouldn't be forced to buy a plan that contains maternity coverage.
Actually, that's how we hold costs down in insurance. It's called shared risk.
Think of it like this. Most of the people in the United States don't live in areas where hurricanes are a problem. If you provide hurricane coverage to everyone in the country, then everyone will pay a few bucks per month. If you only sell hurricane coverage to those at risk from hurricanes, the coverage will run hundreds or thousands per month.
That's an example of social engineering - forcing folks in Montana to purchase hurricane insurance so that people in Louisiana can afford homeowner's insurance.
But, to extend the analogy, the ACA is sort of like forcing that Montana homeowner to pay for hurricane insurance, tornado insurance, flood insurance and volcano insurance. After a while, the Montana homeowner is going to get pissed about helping all these other folks buy insurance.
And there are other problems related to the Law of Unintended Consequences.
- How do you make sure that 320 million people are covered by health insurance?
- How do you force 30 million people (or more) to buy insurance?
- How do you help people who are actually losing their current insurance due to the ACA?
- What about people who are seeing their insurance premiums skyrocket due to the ACA?
Right now, the jury is out. Hopefully, this train won't completely jump the rails right out of the station and Congress will find some way to fix the big problems as they arise.
If implemented sensibly, with some of the more idiotic portions removed, the ACA might actually work. But, given Congress' proven inability to do their jobs, I have little hope of anything sensible happening in the next five years or so.
Let's hope that we haven't managed to permanently cripple our country's economy in the meantime.
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