The 5-4 U.S. Supreme Court decision to uphold the federal health care law doesn’t close the book on health reform. The court ruled that the individual mandate requiring everyone to purchase health insurance is constitutional because the fines for not purchasing insurance are taxes, not penalties.
That may have resolved the legal issue, but it did nothing to make health care more affordable.
How does ordering people to pay for something they can’t afford solve the problem? Despite its name (Affordable Care Act), the federal law focuses almost entirely on getting more people insured. But unless we actually reduce health care costs, we will simply have dumped millions more people into an unaffordable system.
The federal government was a minor player in health care until Medicare and Medicaid were enacted in 1965. Those programs worked for a while, but the baby boom generation that funded the lion’s share of the Medicare and Medicaid taxes through payroll deductions is retiring and will soon become the largest consumers of those benefits.
The Centers for Medicare & Medicaid Services statistics show health care spending per capita increased from $356 in 1970 to $6,697 in 2005 and is projected to rise to $12,320 in 2015. (Those are 2007 numbers).
Again, how will mandates help if people and employers can’t afford to buy insurance? Yes, there are subsidies, but those subsidies are paid for by taxpayers, so we’re still paying too much for health care.
The key to health reform is to reduce costs, not just spread them around.
In 1993, Washington’s Legislature passed health reforms mandating that all employers provide health insurance.
That law ran into a brick wall called ERISA (Employee Retirement Income Security Act) which requires that firms operating in several states must have the same benefits for all their employees. Without an ERISA exemption, the Washington reforms could not be mandated.
In 1995, Gov. Mike Lowry (D), who supported the 1993 reforms, called employer groups together to find innovative ways to insure workers in small business. Out of those discussions came Association Health Plans (AHP) which provide small businesses with affordable health insurance.
Today, AHPs cover more than a half-million Washingtonians, nearly half of whom were previously uninsured because costs were too high.
The bottom line is there is no free lunch. Providing health coverage for 40 million additional people will be expensive. To help pay those costs, the Affordable Care Act reduces current tax breaks and adds 21 new taxes. Still, health reform will sink our economy unless we do more to control costs.
There are several innovative ways to do that:
• Improve competition and reduce prices by letting people shop across state lines for insurance that fits their needs and budget.
• Allow individuals to get the same tax deduction for health insurance premiums as businesses.
• Allow people with healthier lifestyles to benefit through lower premiums.
• Allow people to keep affordable plans like health savings accounts and AHPs.
• Implement tort reform to reduce frivolous lawsuits. Fear of lawsuits forces doctors to order unnecessary tests and causes malpractice insurance rates to skyrocket.
Unfortunately, all of these easy, affordable innovations are missing from the federal health reform law.
Even though the Supreme Court has spoken, there is much work to be done if we are to realize the goal of improving access to affordable health care. Government must be part of that innovation, not just the traffic cop handing out tickets and collecting fines.