It’s about as clean a political debate as you’re going to find. When you break it down as simply as you can, the healthcare fight is drawn up so tightly that it may as well be a Poli-sci 101 case study. It seems messy and complicated, with bills in the thousands of pages and votes that happen without the Congressional Budget Office actually being able to assess the overall impact. But it’s really not. Because no one really needs to know the details to choose what side of the debate they’re on. The line is that bright.
The Affordable Care Act, Obamacare if you will, was 11.5 million words. If it were a book, it would be 40,000 pages. Which means it would literally take years for any one person to read it end to end. So, no one did. And that’s not that uncommon or even wrong in Congress. Because when you take a look at what Obamacare did, all you really had to know to understand if you supported it was whether you were a Democrat, or a Republican.
Obamacare did lots of things. Materially though, the most important of those things can be described pretty simply. Obamacare forced the inclusion of sick people into the healthcare insurance pool. In order to keep that from causing premiums to skyrocket, the act forced everyone to have health insurance or to pay a penalty. It also expanded the definition of poor people eligible for government provided care. Which was pretty expensive. In order to help those who couldn’t afford the new burden of the care they now had to get, and pay for the newly defined poor, Obamacare paid for it by taxing corporations and people that made lots of money.
Which means that the Straussian distillation of Obamacare is that it helped the American poor and disadvantaged by growing the reach of government to force the removal of choice and money from other Americans that had choice or money. You either believe that’s a good idea. Or you don’t. And if you are a political animal, you know exactly what side you’re on.
Conversely, it’s not particularly difficult to track the changes the American Healthcare Act (Trumpcare) will have on the existing American healthcare landscape. Trumpcare is going to give states the choice to opt out of the Obamacare restrictions on things like pre-existing conditions. It’s going to reduce the amount of poor people who have access to coverage through repealing the expansion of Medicaid. And as a result, the reduction in cost will be paid back to rich people and corporations, as it was them who were originally taxed to pay for the original increase. As a result, people who can afford to, can choose to opt into lower cost plans that provide less than the basement plans in Obamacare.
Which means that the Straussian distillation of the AHCA is that we give back choice and money to those Americans who have it, and we hurt the poor and disadvantaged to do it. Again, you either believe that’s a good idea or you don’t. And again, if you are a political animal, you know exactly what side of that debate you stand on.
You can save yourself 40,000 pages of words now.
Healthcare in America is the defining political debate of our time. When you strip the two arguments above down to core principles, you could argue until you’re blue in the face which is right and not change many minds. Do we push choice down to the lowest possible level, the states and the individuals? Or do we take it away and allow the government to force us to help those in need in exchange? It’s the same debate we’ve been having with different words since we were arguing about a Constitution or a Confederacy. And it’s not sorting itself out any time soon.
But what if I told you that neither of those arguments matter? Because very shortly, almost no one is getting the healthcare they get today. Not the poor and sick. Not the struggling middle who values choice above all things. Not the well off. Not even the rich. None of them are going to get the care they get today, no matter what side of this debate we land on. Would you feel different?
I know I would.
Here’s the cold and bitter reality. 42% of all government spending goes to healthcare and retirement in America. In 1962, it was 13%. One out of every six dollars in America is spent on healthcare. The Federal budget at present day is 80% locked in before the year starts. By 2022, it will be 90% predetermined. The average American is 36 years old. In 1960, he was 29. We live to be 82. In 1960 we lived to be 71. Our state and municipal pension plans nationally are only 80% funded. Social Security is 68% funded. Healthcare costs increase at two to three times the rate of inflation every year (it was actually worse before Obamacare). The United States of America spent 580 billion dollars more than it made in 2016. And our collective governments are in debt 29 trillion dollars.
Those are all daunting numbers that represent a hard reality. Neither Obamacare nor Trumpcare address the spiraling cost of healthcare or the ever shrinking amount of resources we will have in the future to try to keep pace with it. They simply change who has choice. They are two buses full of very different looking people. But they’re both going to drive off the same cliff.
That course is set until we do something that no one really feels like we have the political stones to do—fundamentally change the market forces in play for medical care. That’s going take messy government intervention in one way or another. Because left to our own devices, America spends more on low value care treatments and services that don’t make us healthier—scans, just in case antibiotics, end of life care— than we do on education in America for grades K-12. And we sling more drugs than any place on the planet, many of which are just making us sicker. Watching football used to mean funny beer commercials. Now it’s drugs. Because drugs in America are consumer goods. And that’s a problem to solve.
So where do I stand on this choice? Trumpcare or Obamacare? Well, Trumpcare isn’t a better plan. It’s just different. It helps some people and it hurts others. But the one moral good that Obamacare does do, that I can’t say that I see has an equal on the other side, is that it gives people health coverage that otherwise would not have it. And from where I sit, having lived with long term family illness and disabled children, I can’t justify giving that up without significantly more societal benefit than I see in the new plan. I say that as one of the fortunate being taxed to pay for Obamacare. And until we finally go off that cliff, or find the courage to change course, I’d rather help those that need it most.
And one other thing. This truly hard debate gets even harder when one side of the party is led by someone who is or pretends to be a bully. Because no one believes him when he says he’s just trying to do what’s good for us. Even if he is. Whoever is going to turn that wheel, needs to have a hell of a lot more trust than what we’re willing to give to the man at the top right now. And that’s another problem to solve.
Chartwell West 
Where live we are treated at the best hospital money can buy. It really is a first class operation. I have had serious surgery there and so has my husband. The problem is what is not talked about. This so-called nonprofit hospital owns mammogram offices, MRI centers, CAT scan centers, and many outlaying small clinics. The doctors who work in those clinics are expected to send their patients for as many procedures as possible. In the course of my life the doctors have tried, and sometimes managed, to send me for RA tests, stress test, bone density tests, and everything else they can think of. When I realized I was getting x-rayed all the time I put a stop to it but now I worry that in 10 or 20 years I will pay for all those test with some form of cancer. On the other hand my husband had to have a radical surgery that was either going to kill him or save his life and it was done to perfection. Somehow, someone in the federal government, and state government’s are going to have to rein in these octopi disguising themselves as nonprofit hospitals. I have no idea if a poor person could have gotten the good care that my husband and I have had. What I do know is that nobody in the medical field is poor.
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That number is the average age of American at that point in time. Which is relevant for healthcare costs and social security funding.
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A small question. How could someone who is 37 today have been 29 in 1960? I was two years old in 1960 and I am 58 today.
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No, Terry, I’m not saying “remove” insurance. I’m saying Insurance is not healthcare. Insurance is your emergency; the just in case. It’s a hedge against the unknown, and therefore based off risk, you enter a pool of others at certain levels of risk. People are treating insurance (in these debates) as if insurance is healthcare; it’s not. Insurance is NOT “I give you $200 a month and you pay my medical bills; what, you won’t do that? Govt! Make them pay my medical bills!”
This is lost on too many people. And Insurnace companies, like any company, if govt wants to legislate a market to favor them (which Obamacare and many pieces of legislation in the past has done), then companies will jump in bed with govt. Govt manipulation of any market causes false prices. And much legislation is written to favor big insurance companies that crowd out smaller, cheaper insurance companies; in return, the big companies promise govt they will abide by their desires.
And again, removing barriers to entry for new more affordable insurances companies doesn’t address why “medical care” is expensive. And Dems mostly, and Republicans and their citizen backers think it’s all about coverage. While not truly addressing why healthcare costs (and education mind you; the two fastest increasing cost of services and both highly subsidized by govt) are so high.
A simple example of people’s lack of understanding is a diabetic who is insulin-dependent. That’s a “pre-existing condition.”
This is not a risk to be insured, it’s a fact. Hospital visits, potential complications… those are things to insure against. Those are risks of major expenses that could suddenly happen, such that it makes rational economic sense to have an insurance arrangement for.
A monthly supply of insulin, on the other hand, is fixed, predictable, and 100% certain. But insulin in the US is expensive. It should be way cheaper. There’s no actuarial risk-management at stake, and that’s the whole point of insurance.
However, in this case, cost of medical supplies or care are a problem. There’s the price-gouging game, where the fact that it’s covered through the broken and non-competitive health-insurance system (and gov’t-set CMS prices) causes massive price inflation. Then there’s the monopoly privileges granted by the FDA to the manufacturers (there’s no generic modern insulin on the market!), killing competition and raising prices for a relatively simple century-old medication. (Remember the Epi-pen debacle?)
You don’t use insurance for car spark plugs, or battery. You purchase them at competitive prices; you have a choice. You should also pay out of pocket for insulin; over the counter, at affordable prices, from one of multiple competing manufacturers, through one of multiple competing pharmacies, and under the supervision and care of one of multiple competing medical providers. If the government would just get out of the way; but it interferes. Yes, some push this for altruistic reasons, but ignore the economic consequences of subsidizing and deciding who gets what and who’s allowed to be in the market. They think they help the less fortunate, but actually drive all of us down a path where the whole thing “will” collapse.
So we need to stop trying to cram more people into a broken system, instead of creating a functional market that we can then find a way to help manage the few poor in the fringes that still can’t afford the cheaper medical care.
We need to stop letting the govt “force” people into paying into an absurd, convoluted, overly-restricted, hopelessly uncompetitive system, that costs ten times more than it should, just to line the pockets of politicians, their politically connected middlemen and manufacturers. We’re even pushing doctors out of the system; less doctors, higher demand, even higher prices.
Subsidies and manipulation of markets cause high prices! Not Insurance as one piece in a system bereft of free market, freedom of choice or competition to drive prices down. Yes, when govt grants favors to Insurance giants, insurance goes up when they are in bed together. But guaranteeing insurance, paid by others who get soaked, to pay for care that has higher costs doesnt “solve” the healthcare issue.
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My assessment isn’t that insurance companies are the root cause of cost expansion. But instead, the structure of the market as it exists, one contributing by not dominant aspect of which is the use of insurance to fund care, specifically as it relates to individuals who would be forced into high risk pools. There’s lots to go around here.
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Hi Chris, please be more specific. Your thought above is: If medical insurance was removed from the health care system then medical care expense would, a) increase, b) decrease, c) remain the same? Looking forward to your reply, Terry
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Your assessment that Insurance companies are what make high costs in healthcare is not rooted in any economic truth. Even if it were, which it’s not, insurance companies collude with govt on every aspect of legislation. They favor any legislation that gives them more and crowds out competition. And this is handed to them by democrat and republican politicians. Health care costs are not high because insurance makes them high; you should not only seek authentic empirical economic date, but should also read up on what a “risk pool” is and why those costs go up.
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Great prose Sean and well thought out. I would also say that today is a very dark day for American Citizen Healthcare. Let us, however, focus on why we are here. Bottom line…our health care is traded on the stock exchange. From 2015, Boston Scientific (BSX) gained 40%, UnitedHealth (UNH) gained 17%, Bristol-Myers Squibb (BMY) gained 16%. To put this in perspective, if you invest $1,000,000 and make 15% on that money for one year you will make $465.75 every single day of that year. And the people that invest much more than million dollars a year in our health care system will work very hard to make sure any changes that may occur will not favor a reduction in their return on investment. Sadly, those same people have direct access to Congress. I am grateful for men like Sen. Bernie Sanders for trying to change our health care system for the better. I’m also pretty sure it won’t happen to any large degree.
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When are you running for office? You’d have my vote and I’m a California liberal.
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Mr Hughes, I have read some of your articles. I have enjoyed your articles and from what I have read, I don’t think you qualify as a conservative in today’s term, but more as on the liberal side of Christianity.
As to the healthcare debate. Let me say first, I am from Canada. As you know, we have universal health care coverage. It is not perfect and it costs the government more for hospital visits. But that is not the question I have. In Canada, like one of your article states, we make sure everyone gets to go forwards in society. Yes, it might sound like we are socialist, communist, Marxists, or whatever label you like to attach us with. But we believe in compassion for our fellow Canadians, even those that might abuse the system.
I really never understood the mentality of why in the US, why is it so hard for people to agree to having universal health care. Often times, on social media, I would read comments like: I will never have x,y,z conditions, so why am I paying W amount when really it should be much less than that. The trouble is health care is not like auto insurance and should not be like auto insurance. Because when you get into an accident (non medical treatment needed), and during the claim process, insurance company will ask you myriad of question to determine whether you are at fault, nature of the accident and whether you will be covered financially. In the end, it all comes down to money and if you don’t qualified for the claim, it will just be financial inconvenience for car repairs.
With medicare, it should not be like auto insurance because we are talking about people’s lives here. And this debate about health coverage basically puts a price tag on how much a rich person’s vs a poor person’s love are worth. I can even accused all the Republicans that they are hypocrites for claiming to be proliferation and yet, they won’t even want to help their fellow Americans out over this singular import issue. But I am not going to, because that is for a different conversation and as your Canadian cousin, I will try to be charitable. I will say this, if ever American has a right to life, liberty and justice, then they should be living in a society where they don’t have tow worry about whether they will get the help they need when they are ill because they lack financial resources. Liberty, freedom and justice implies a responsibility to care and also to have compassion for your fellow citizens.
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That’s what I mean by restructuring the market forces in play.
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No mention of the fact that insurance companies in the US system take a huge bite out of our healthcare spending and are the main reason that our costs are so much higher than our ‘single payer’ developed country peers?
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