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Health Reform Will Happen, and None Too Soon

A Commentary By Froma Harrop

Thursday, July 11, 2013

Obamacare is going ahead. It's happening, and concerted efforts by its foes to scare the public and otherwise delegitimize the health care reforms will be ultimately futile. That doesn't mean that Republican opponents won't try. The question is why, other than crude political posturing, would they want the Affordable Care Act to fail?    

Our health care system has been milking the taxpayers, the government and individuals for decades. The United States spends two times the rich-country average per person on health care. We're talking rich countries -- the Switzerlands and the Germanys. And this average spending is enormous, given that it includes millions of Americans with no health insurance at all.    

Health care costs are eating the American economy alive, and these reforms represent the first serious attempt to address the crazy waste and overcharging. In the United States, for example, the average amount paid for childbirth is nearly $10,000, versus just over $4,000 in Switzerland -- a country offering the highest-tech care and where a McDonald's Big Mac costs $6.81.   

From 2004 to 2010, the price insurers paid for vaginal births rose 49 percent in this country. And the average out-of-pocket expenses for the parents jumped 400 percent.    

This is done by billing separately for every blood test, ultrasound and other routine service, prescribing too many of them and overcharging at the same time. Women whose ultrasounds show healthy babies at 20 weeks report being told to have expensive scans every week afterward, though medical guidelines don't call for them.    

Prominent conservatives keep talking about health reforms as some kind of moonshot to Jupiter's Io, though every other modern country has done it. They shake their heads in wonderment at the prospect of government regulating 17 percent of the economy.    

First off, the federal government is already paying 55 percent of the country's health care bills. Secondly, the rest of health care is highly regulated by both the feds and the states. The one thing that isn't well regulated is the waste. Health care is 17 percent of the economy precisely because we throw so much damn money at it without question.   

Oh, no, the delegitimizers moan, companies will use Obamacare to drop their workers' coverage. They'll prefer paying the penalty to providing health insurance.    

But in Massachusetts, which supplied the model for Obamacare, the opposite happened. In the seven years since the Massachusetts law went into effect, the number of residents covered by their employers actually rose 1 percent. (Nationally, employer-based insurance fell 5.7 percent.)   

No one expected this, including the economists who help design the plan. Furthermore, Obamacare's large-employer penalty of up to $3,000 per uninsured employee is far higher than the $295 penalty in Massachusetts, giving employers there even less incentive to provide coverage.   

But two things happened, according to a PricewaterhouseCoopers study. The individual mandate prompted many people who didn't join their employers' health plans to do so.   

And companies found that health benefits were essential to attracting and keeping good workers. Between 2005 and 2011, the percentage of small companies offering coverage in Massachusetts rose from 49 percent to 59 percent.    

Heaven knows, the Obama administration has done a miserable job of pushing, promoting and explaining its health care reforms. Its decision to delay for a year the penalties to be charged large companies (more than 50 employees) for each uninsured worker affects relatively few people and is not a big deal. The vast majority of big companies already provide such benefits.    

But the delay has created opportunity for further eroding of public confidence in Obamacare. There will be other mishaps along the way, but there must be no stopping the health-reform train. Otherwise, medical spending will sink us.  



See Other Political Commentary

See Other Commentaries by Froma Harrop.

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