Good morning Hank, it's Tuesday- what is this weird, non-airport background?
Anyway, yesterday was the five year anniversary of the signing of the Affordable Care Act,
widely known as Obamacare, which made me wonder if it's, ya'know, like, uh... worked.
So here's the summary of what I found.
In the United States in 2009 more of my tax dollars went to healthcare than would if I
lived in Japan, or the United Kingdom, or Australia, and in exchange for all of that
money we did not get the universal health care that people in all of those countries
enjoy.
Five years later, in 2014, we spent about the same percentage of our GDP on health care,
and we still don't have universal health care but we do have less un-universal health care.
By the way, I'm going to oversimplify here a lot.
For better information, you should check out "Healthcare Triage".
So here's how it worked in the halcyon, pre-Obamacare days of 2009: the government provided insurance
to elderly people, through Medicare, and also to some poor people, through Medicaid.
Many other people got insurance through their jobs or paid for it themselves, but this still
left a lot of people out: like there were 44 million people without insurance.
This was obviously a problem for those 44 million people, but it was also a problem
for the rest of us because we did have a kind of universal healthcare in the United States:
like when uninsured people got sick and went to the hospital, they did receive care and,
if later, they couldn't pay for that care, those costs would be absorbed, either by the
rest of us paying higher prices for healthcare, or else by taxes, because the government had
to subsidize public hospitals.
But it wasn't really Universal Healthcare, because you can't, like, go into an emergency
department and get your week's supply of insulin if you're diabetic.
So in the US we didn't, and still don't, have real universal Healthcare, we have, like,
if-you-get-shot,-we-will-try-to-patch-that-up-for-you universal Healthcare.
And this system was astonishingly inefficient.
Like, we spent more than 17% of our total Gross Domestic Product on healthcare.
In countries like Canada and France and Australia and the Netherlands, they spend less than
10% of their GDP on healthcare, and they get similar, or in many cases better, health outcomes.
Also, back in 2009, insurers could deny you access to healthcare insurance if you had
a "pre-existing condition": a phrase intentionally so broad that it encompassed, like, everything.
For instance, Henry Reich of "Minute Physics" was once denied insurance because he had the
pre-existing condition of tinnitus, or ringing in his ear.
The only way to get around the pre-existing condition clause was if you worked for a big
company, you could get insurance through them.
And that, of course, incentivized people to work for big companies when they might otherwise
be doing different kinds of work, like...I don't know, making "Minute Physics" videos.
So, the Affordable Care Act sought to make the labor market less bananas; decrease health
related bankruptcies, the number one cause of bankruptcy in the United States; and, ultimately,
to insure those 44 million people without insurance, while, at the same time, over time
decreasing the amount of money we spend on healthcare.
It was going to solve the access problem by creating these healthcare exchanges where
private companies could compete for people's business, but they couldn't discriminate based
on gender or pre-existing conditions.
The law also would expand Medicaid, which would get insurance to more poor people, and
it required companies with more than 50 employees to provide affordable insurance to their employees,
or else pay a gigantic penalty.
This would all be paid for, more than paid for, hopefully, by cost control measures.
These range from getting tougher on Medicare fraud, to incentivizing hospitals to keep
elderly patients healthy so they don't get readmitted to the hospital.
There's also a new tax on, like, tanning salons, and an increase in the Medicare payroll tax
for income over $250,000 a year.
But has it worked?
YES - insofar as things are better than before.
And also...NO - insofar as we are nowhere close to a path to sustainable healthcare
spending.
So the ACA was phased in slowly, and the real meat of it didn't get going until 2014.
You'll recall the roll-out of the healthcare exchanges in late 2013 was...a complete disaster.
The website, healthcare.gov, was plagued with glitches and really just...didn't work.
Admittedly, buying private insurance in the US before the Obamacare exchanges was arguably
even worse than healthcare.gov.
But it was just terrible.
I remember trying to sign up in those early months and it was truly awful.
What has not been widely reported is that, now, it's really easy.
In general, the exchanges now work very well and more than 12 million Americans, including
me, have signed up for insurance through them.
Insurance premiums are going up, on average, more slowly than they did before the exchanges,
and more insurers are participating, which means there will be more competition in the
market.
Plus, the law is costing less than expected because fewer employers than expected have
dropped fewer people than expected off their insurance.
And, it doesn't seem to be negatively affecting the job market.
It certainly led to more freedom in the labor market.
For instance, Sarah Green could leave her insurance-providing museum job to start an
art show with PBS Digital.
And certainly for people who can get insurance now who couldn't before, either because of
pre-existing conditions or because they couldn't afford without the government subsidies, the
ACA is a really big deal.
And none of the collapse of the healthcare system or "death panel" predictions have come
to pass.
Instead, uninsurance rates in the U.S. have dropped dramatically, and early signs indicate
that at least in some sectors the law is improving health.
By the way, sources for all this stuff in the doobly-doo.
On the other hand, many millions of people still don't have insurance and under-insurance,
where people technically have insurance but still end up with medical bills they can't
afford is a huge problem.
And while the growth of our healthcare costs has slowed, we still spend over 17 percent
of our GDP on healthcare.
Most other developed countries spend far less than that and still have citizens who live
longer and healthier lives than Americans.
And before you say that's because Americans eat or drink or smoke or whatever more than
British people: no, that's simply not true!
Have you ever met an actual British person?
I don't mean like Jack or Finn or Charlie, I mean a real one.
So yeah, if nothing changes, healthcare costs are still going to crush us in the long run,
because the thing about the ACA is that it's not particularly radical.
Like, the 12 million people who got insurance through the exchanges, that's less than 4%
of Americans.
For the vast majority of people, very little has changed, and that means that the underlying
problems haven't really changed.
We spend way too much on healthcare, and we get too little in return.
To take that seriously would require radical change: government interventions like price
controls, for instance.
Or a single-payer healthcare system, or a truly free market system where if you show
up to the hospital with a gunshot wound and you can't pay for treatment, you don't get
treatment.
So Hank, the old system definitely wasn't working, and the ACA is working, in so far
as its job is to get health insurance to people who don't have it without disturbing the health
insurance ecosystem for most people.
But the ACA didn't really replace an existing system so much as it grew on top of it.
Now the fact that so many insurers are bringing more plans to the exchanges indicates that
probably the ACA will continue to work, unless the Supreme Court eviscerates it in a few
months.
But the ACA has not and will not solve the long-term healthcare spending challenge that
we face.
Neither, of course, would repealing the law, if anything the the healthcare spending problem
was worse before Obamacare.
Rather than the endless discussions of repeal or defend we should be frank about the choices
before us.
As healthcare economist and healthcare triage host Aaron Carroll told me, trade-offs are
messy.
You can get reform more easily and more cleanly, but not necessarily while preserving the private
market.
You can make healthcare cheaper, but not without imposing even more regulation.
You can insure more people and make it cost less for everyone, but not without spending
more tax dollars.
Hank, healthcare policy experts across the political spectrum seem to acknowledge this
complex reality.
It's our job now to make our politicians acknowledge it too.
Again, for more information and lots of other videos about healthcare, please check out
Healthcare Triage.
Hank, thanks for reminding me last week about the many pleasures of being in a crowd, I
will see you on Friday.