The federal government has been trying to help control healthcare costs for the better part of 50 years. Their first serious legislative effort was the Healthcare Maintenance Organization (HMO) Act of 1973. Despite numerous additional efforts in the years since, healthcare costs have continued to climb. Even the Affordable Care Act (ACA) hasn’t done anything to contain costs.
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The ACA’s Good and Bad
If you remember all the arguments leading up to the ACA’s passage in 2010, you know that then-president Obama’s pet project promised three things:
- Increasing the number of people with health insurance
- Improving the quality of care patients received
- Reducing the costs of healthcare at the consumer level.
One can easily make the case that the first promise was achieved. Primarily through expansion of Medicare and Medicaid, the ACA has added some 20 million previously uninsured people to the rolls of the insured. But even that achievement is colored by the fact that approximately 6 million people who previously bought insurance on the individual market lost their coverage.
An honest analysis more than a decade after passage of the ACA reveals that the legislation offers both good and bad. Unfortunately, the bad tends to outweigh the good when you consider that two of the three promises put forth by the legislation still haven’t been accomplished – and are unlikely to ever be.
We Have an Administration Problem
So what’s the deal? Why haven’t healthcare costs come down as a result of the ACA? A 2017 article published by The Conversation explains it pretty thoroughly. Though the article is almost six years old at this point, everything it discusses is still relevant today. Nothing has changed because the system itself hasn’t changed.
When people talk about how our healthcare system is broken, they often fail to draw a distinction between access and payment. The truth is that we do not have an access problem. By law, no person in the U.S. can be denied lifesaving care based on an inability to pay. The real problem is that so many people cannot afford health insurance.
According to The Conversation piece, healthcare costs continue to rise because administration continues to get more complicated. More complex administration requires more levels of administration. And each level of administration costs more money to implement.
The Conversation is right about the administration problem. They are wrong to blame the private health insurance industry as the one and only culprit. Likewise, switching to a single payer system funded by the government will only add to the existing layers of complexity. The only way to solve the problem entirely is to reverse course and go back to the system we utilized prior to 1973.
Consumers Need Alternatives
There is no way Washington will let us turn the clock back on health insurance. So the only other option is to work within the system to give consumers alternatives. For example, one of the most popular low cost alternatives to standard health insurance is the self-funded employer plan. According to Las Vegas-based StarMed Benefits, self-funded health benefits are an increasingly popular choice among businesses of all sizes.
Self-funded health plans work well for a variety of reasons. If they can help restore at least some sanity to the healthcare payment system, they ought to be aggressively promoted along with any other solutions offering similar results.
The ACA has not delivered on its promise to contain healthcare costs. No government program ever will. So it’s up to creative minds outside the walls of government to figure out alternative solutions that actually work.