Imperfect Reform

Will this bill help solve the healthcare cost crisis in the US? Maybe. Or maybe not. And of course, tomorrow the Supreme Court could make everything I just said not matter.

[In light of the impending decision that will decide whether the Affordable Care Act is constitutional or not, I have decided to shamelessly recycle my old writing. Here is a somewhat edited repost of a piece I wrote at my high school newspaper two years ago. The piece still more or less reflects my current opinions on the bill.] 

Why The New Healthcare Bill Falls Short.

Turn on any newscast these days and you can find all manner of hyperbolic language about the new healthcare bill. “The end of American freedom as we know it!” some opponents claim. Others make the—rather rich—claim that healthcare reform is equivalent to passing the Civil Rights Act. The truth, as always, lies somewhere in the middle

First to the good; the healthcare bill does address one of the main problems with the current system; a lack of insurance options for those who neither have employer provided insurance nor are poor enough or old enough to qualify for Medicaid or Medicare, respectively. Those without insurance are provided with state based exchanges through which one can buy coverage . In addition, the bill ends some highly unpopular practices of insurers, such as the denial of coverage to those with “preexisting conditions”. While those with such conditions will benefit from coverage, the added burden of covering more unhealthy people will disburse their costs throughout the system, increasing premiums for most.

With that, one must now address the many imperfections and disadvantages of the bill. Firstly, while the main source of controversy had been the individual mandate, the real idiocy of the bill is the “employer mandate”, the provision which requires companies to pay at least 72.5% of the costs of employer insurance. Other provisions of the bill, such as the individual mandate, state-based insurance exchanges, and subsides for poor families obviate the need for an employer mandate.

More importantly, an employer mandate would make hiring less palatable by making the act of hiring a worker more expensive. Even worse, the entire provision perpetuates the model of employer provided insurance, which highly distorts the market by removing the actual consumer from deciding what plan they have, or who they get a particular medical procedure from, thus insulating doctors from competition even more than insurance companies themselves. As one analyst writes, “The already weak incentives to constrain costs in a third-party system shrivel further when individuals do not even pay directly for their own insurance.”

Interestingly, even when judged by the standards the bill’s more ardent supporters set out, it is highly flawed; political pressures forced undocumented workers off of the ability to use the health insurance exchanges—even if no government money is used to finance their insurance. Meanwhile, federal dollars from the exchanges are not allowed to finance abortions. Whether or not one opposes abortion, this particular addendum sets a dubious precedent- that any policy which has enough people opposed should not get federal dollars-should left wingers band together to bar the Iraq War from getting federal dollars? Perhaps evangelical Christians should rally to have high schools that teach contraceptive use barred from federal education grants? The possibilities are endless.

Despite the imperfections of the new healthcare bill, it is a tentative step in the right direction, if only because the status quo is so awful. Unfortunately, many of the problems of the bill are not considered to be problems under the Democratic ideological paradigm. That, combined with the lack of substantive contributions from Republicans and  conservatives to this debate (and the excommunication of those who did, as a certain David Frum may attest), does not bode well for the future of American healthcare. The major problem with the US’s system, which this bill does not really solve (and arguably perpetuates) is that we have neither a true free market system, nor a single payer system. Instead, America gets a mushy mix of corporatism.

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