Affordable Care Act – Not So Much!

I am sure we can all agree that it is a good thing to increase access to high quality medical care, put patients and doctors in charge of treatment decisions, and lower medical care costs. I disagree with Democrats and some Big Government Republicans that the government should control our medical care system.
Free markets in our medical care system will increase access, lower costs, and put patients and doctors in charge.  Even before the Affordable Care Act (ACA) was signed into law in 2010 (without a single Republican vote), our medical insurance system had lots of government coverage mandates and a lack of real competition for insurance providers.
America’s medical insurance system went through a transformation during the World War II and the post-war era. Prior to WW II, most medical care services were paid for directly, without third-party insurance payments. With a worker shortage during WW II, employer-based medical insurance was a way to entice employees. The tax code was amended to give employers 100% deductibility for employee insurance benefits.
The ACA does have some good features. Uninsured people with pre-existing medical conditions can’t be denied coverage. That can also be accomplished by states setting up high-risk insurance pools. There is also no lifetime maximum insurance benefit limit for people receiving catastrophic care.
Former New York Lt. Gov. Betsy McCaughey is a medical care analyst and patient advocate. She notes that medical insurance premiums have risen 24% since the passage of the ACA in 2010. Most of the people who have gained coverage since then have been added to the Medicaid rolls. Low re-imbursement rates have caused many medical service providers to stop accepting Medicaid patients.
Five years after the passage of the ACA, there are still more than 30 Million uninsured Americans. Emergency room visits have increased. When the uninsured poor visit the emergency room, the costs get shifted to those who pay for their medical treatment. That drives insurance premiums up.
There are high tax subsidies for those who receive medical insurance through the ACA medical insurance exchanges. A family of 4 with an annual income of $94,000 qualifies for refundable tax credits. The credits get sent directly to the insurance companies.
In addition to higher insurance premiums, the pre-coverage deductibles have gone up dramatically. Most policy holders must pay $3000 or more for medical services before they receive any payments from their insurance provider.
Many of the estimated 30 million Americans without medical insurance are young and healthy and don’t want to pay high premiums with high deductibles. The ACA assesses fines for those without qualified medical insurance plans. The fine will be $695 per adult and $348 per child by 2016. The IRS added 2100 agents to enforce the fines.
Our medical insurance system was broken before the ACA was passed, and it is even worse now. We need to end the federal mandates and let the free market work. Here are some principles which will make medical care more accessible at a lower cost:
• Require up-front pricing for medical products and services. Name another industry which does not list its prices. I recently paid $49 for a blood test at Any Lab Services Now on Ashley River Rd. which cost more than $300 through my insurance company.
• Don’t have coverage mandates for medical insurance policies. Why demand that a 70-year-old woman to have coverage for pre-natal care? Let policy holders choose what coverage they want beyond catastrophic care.
• Allow for more competition in the insurance market, to include the opportunity to shop for policies across state lines.
• Promote charity medical clinics as an alternative to Medicaid. Seacoast Church operates the Dream Center Clinic in North Charleston, which provides free medical care to the uninsured who earn less than 200% of the federal poverty level ($62,000 for a family of 4). Seacoast wants to build a second clinic in West Ashley.
• Expand pre-tax Medical Savings Accounts, which allow families to use pre-tax income to pay for medical care before they reach their high deductible.
The 2016 Presidential campaign will be about solutions. Our medical care system is broken, but we can fix it. Let’s focus on more accessibility and lower costs, which are only achievable in the free market!.
John Steinberger is the former chairman of the Charleston County Republican Party, a leading Fair Tax advocate, and a West Ashley resident. He can be reached at John.steinberger@scfairtax.org.