What’s Wrong With the Affordable Care Act

The Affordable Care Act, also known by many as Obamacare really set this country’s healthcare system back in a major way. Let me try to explain why I have such an issue with it.

The biggest problem is that it is not a single-payer (“government-funded”) healthcare system like in every other first world country, not to mention very many third world countries too. This is the only correct system. If you believe our system of health insurance is more or less functioning properly and nicely and efficiently and providing the best bang for our personal and government-contributed bucks, you are utterly misinformed.

Working in healthcare IT for many years has given me a small glimpse into the madhouse of medical billing in America. The system is fucked. Ask anyone in healthcare and they’ll tell you the same thing. It’s all dumb. The thousands upon thousands of different insurance plans, the multitude of types (government, HMO, PPO, Discount Card, Indemnity, POS, EPO, Medicare, Medicare Advantage, Medi-Cal, Medicaid, Premier, Worker’s Compensation…) have different rules about reimbursement and fracture the American people’s ability to negotiate good deals on drugs and services. There is wild variation in prices due to an utter lack of transparency. The scheme of employers providing healthcare for their workers makes no logical sense, hurts competitiveness and massively screws over anyone who loses their job, unless they want to pay COBRA to keep their coverage (now around $1000/mo for some). Medical bills are submitted to third parties on all sorts of different paper forms, often faxed around. Oh yes, faxes are considered state of the art when it comes to medical billing and health insurance companies. In short, the current system would only be considered acceptable by anyone who has no idea how much better pretty much everyone in the developed world has it than us. This is reflected by popular opinion, as of 2016, showing a majority of Americans just want a normal federal-funded single-payer healthcare system. It’s the obvious solution, everybody knows it. So why don’t we have it?

Well, we have this health insurance scheme instead. Instead of the government providing basic healthcare to everyone it only provides healthcare to some people through a bewildering array of disparate systems. Poor people, people with kids, poor people in California, seniors, veterans, congresscritters, that sort of thing. If you don’t fit into one of those you can buy healthcare insurance instead of maybe get it provided by your employer if you’re lucky. A plan can cost several hundred dollars a month and may or may not include vision and dental insurance too. There is a provision of the ACA that says everyone must have health insurance or face a steep tax penalty (2.5% of your total household adjusted gross income). As a result, everyone must have health insurance.

Now I, just a lowly taxpayer, wonder if everyone has insurance, what exactly are the insurance companies doing? What benefit do we as a society gain from a universal system of insurance? Well, supposedly the health insurance companies price risk appropriately and disburse funds for claims.

Probably the main indicator of your likelihood of filing a lot of expensive claims are your pre-existing conditions. Like if you have cancer or some rare disease, you’re going to cost a lot of money. Before the ACA this would make it very hard to get normal health insurance because you would be a terrible policyholder from the insurance company’s point of view. One of the truly fantastic things, and at the same time one of the most subtly problematic things in the ACA is that it disallows pre-existing conditions from driving up your premiums or being denied coverage. This is actually really great news for seriously ill people, and it deserves being said that it has given (relatively) reasonably-priced healthcare to millions of people who need it the most. The end result appears to be a major net positive for society, and it really is. Taken in a vacuum this is a noble and wonderful thing. But it also undermines the entire argument for the extant system.

Now if everyone has insurance, and the insurance companies are not allowed to properly price risk, what function do they provide? If they cannot perform any real actuarial purpose then they are essentially clogging the arteries of our healthcare system, siphoning off vast quantities of money, wasting everyone’s time and collecting a massive payoff while decimating the quality of our healthcare.

Healthcare providers just want to care for people and, well, provide health care. That’s why they got into it and that’s what makes them put up with the years of school and massive debt and internships and all the rest. Once they actually try to practice medicine though they are faced with the intractable and thankless task of trying to deal with health insurance companies. Filing claims, getting denied, re-filing claims, telling patients you can’t see them because their employer went with the wrong insurance company or plan type, telling seniors they can’t get the medicine they need, buying ink for your fax machine, dealing with your medical billing intermediary company, upgrading to ICD-10, and on and on. This takes time and costs a great deal of money. It is not good for anyone except for the health insurance companies because it gives them a reason to exist.

The potential saving in efficiency, the massive gain in time of providers and nurses and office managers, the insanely powerful bargaining power, the standardization of billing forms and reimbursements would be some of the incredible benefits of having a coherent national health system. My problem with the ACA is that it cements this horrible mess of insurance providers. Its smaller improvement in expanding coverage means that we can pretend our system works for longer now instead of getting the sane and efficient system that we desperately need. That is why I have a problem with it. It powers the vacuum machine stuck in our pockets by health insurance companies. It entrenches the current corrupt system. It makes it that much harder for us to right it. The current shit abyss of healthcare probably resembles that of our legal system. It’s something most of us healthy people don’t have to get too acquainted with, so we don’t demand much change because it doesn’t affect us yet. But when you fall into this pit you’re going to wonder why our country is so fucked up. Even having health insurance won’t protect you from bankruptcy, of which health care is now the number one cause in America.

If a majority of Americans want a single-payer system, and we’re the only country that hasn’t gotten it yet, why do we still have this joke system of rent-seeking insurance companies taking their fat slice of the $2.9 trillion dollars a year we spend on health care (projected to shoot to $5.2 trillion in 2023)? Well, for one thing the opinions of the bottom 50-70% or so of Americans have no discernible impact on policy that gets made at the federal level. As in, the majority of Americans are literally disenfranchised because politicians do simply do not care what they think.

In 2007 health insurance companies were major donors to Obama’s and Hillary Clinton’s campaigns to become president. In the 2012 campaigns the insurance industry (with Blue Cross as the largest individual) contributed “a record $58.7 million to federal parties and candidates as well as outside spending groups” according to OpenSecrets. Draw your own conclusions.

MarketWatch has a bunch more fun facts about specific major problems with our health insurance system.

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