Why We Can’t Afford Healthcare

The day I retired I was honored to receive a phone call from Governor Otter asking me to serve on the new Idaho Health Insurance Exchange Board. I was not in favor of the Exchange, but I saw an opportunity moving forward to possibly “privatize the exchange” and put it in the hands of health insurance brokers. I also asked Governor Otter if he could provide complete access to me to the Departments of Insurance and Health and Welfare, then run by two outstanding men Directors William Deal and Richard Armstrong. That access provided me an education that I was lacking, and that I thought I needed to serve on the Board.

At the time Idaho unemployment was running above 9% and the uninsured rate over 15%. Small businesses, independent contractors could be helped-I thought in the short run, and then the exchange could be privatized. Your Health Idaho has had outstanding leadership at all levels of management. The current CEO is outstanding and so is his entire team. The Board and its Chairmen are excellent. In Idaho we built the best Health Insurance Exchange in the Country—but we are Idaho.

Unfortunately, like so many programs founded with good intentions, the organization has been the victim of “mission creep”. Our predictions early on were correct. Both Medicaid expansion and the abuse of the Exchanges by politicians have decreased supply, created increased demand, and as predicted increased the overall cost of health care. The beneficiaries have been hospital systems and insurance carriers-as predicted.

According to 2020 US Census data:

• In 2020, 8.6 percent of people, or 28.0 million, did not have health insurance at any point during the year.
• The percentage of people with health insurance coverage for all or part of 2020 was 91.4.
• In 2020, private health insurance coverage continued to be more prevalent than public coverage at 66.5 percent and 34.8 percent, respectively. Of the subtypes of health insurance coverage, employment-based insurance was the most common, covering 54.4 percent of the population for some or all the calendar year, followed by Medicare (18.4 percent), Medicaid (17.8 percent), direct-purchase coverage (10.5 percent), TRICARE (2.8 percent), and Department of Veterans Affairs (VA) or Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA) coverage (0.9 percent).
• Between 2018 and 2020, the rate of private health insurance coverage decreased by 0.8 percentage points to 66.5 percent, driven by a 0.7 percentage-point decline in employment-based coverage to 54.4 percent.
• Between 2018 and 2020, the rate of public health insurance coverage increased by 0.4 percentage points to 34.8 percent.

More children under the age of 19 in poverty were uninsured in 2020 than in 2018. Uninsured rates for children under the age of 19 in poverty rose 1.6 percentage points to 9.3 percent.

 In 2000 the number of uninsured was 11%. With the ACA at a cost of over $11 trillion we have decreased the uninsured by 2 %, though at the beginning of the ACA the uninsured number had grown to 15%. The number of uninsured decreased in all States even those that didn’t have their own exchanges or didn’t expand Medicaid since the ACA.

The American Rescue Plan Act (ARPA) injected Obama care with steroids. To understand the argument data from the American Council of aging may be helpful. What is important is that coverage criteria changed. Under the (ARPA) those earning more than 400% of the Federal Poverty Level (FPL were eligible for subsidized premium payments. For example, a 60-year-old head of a family of 4 and a household income of $265,000 was eligible for a $7800 subsidy on a plan that costs 50% more than it did 20 years ago. For the 5 million people making less than 150% of the Federal Poverty level they paid nothing for their coverage.

Here is the catch—the subsidies don’t go to patients but to the carriers who can continue to increase premiums knowing that the government will pick up the difference. The carriers then pay ever increasing prices to the hospitals whose revenues increase year over year—faster than their costs. The large hospital systems then pay salaries to executives in the $ millions. The past CEO at St. Luke’s made $18million over two years, paid for by insurance premiums and co-pays paid for by employers and individuals who are paying more for their coverage and are at the same time subsidizing the costs for health care for everybody else with their taxes. Remember Access Quality—Cost? No wonder the lobbyist corporate crony system is alive and well. They keep paying for campaigns for politicians who support the cabal and health care costs continue to rise. The legislators and commissars in government also have their health insurance paid for by taxpayers who voted for them.

Small companies seeing their premiums rise and some individuals will be shifted onto the exchanges. It is estimated that the average health care plan for a family of 4 without subsidies costs $25000/year counting co-pays and deductibles. This puts a further burden on taxpayers and increases the cash flow to the carriers and the large hospital systems.

The Exchange in Idaho was supposed to be a temporary fix at a time of high unemployment and slow economic growth. If it had been privatized early on it would have created a more competitive market and lowered prices. Both the (ACA) and the (ARPA) have increased the overall cost of health care while milking the everyday working family both in taxes and the cost of their own insurance plans. Early on we made the simple argument that with decrease aggregate supply—hospital beds are down 15% over 20 years and per capita physician to patient numbers are down, and with increased demand. Costs will go up and those executive salaries would go way up, and that is precisely what has happened. It is not executives or the politicians who they and their organizations contribute too that add value to the health care system; it is the doctors, nurses, and technicians that take care of patients.