Wednesday, April 23, 2014

The Premise of ACA

A recent discussion on LinkedIn about a Bloomberg View article last month recently included this comment:

Young Invincibles "who truly can't afford to purchase health insurance are eligible for subsidies to make it more affordable. Why should i continue to subsidize them because they don't think about the possibility that they are one car accident away from bankruptcy? The premise under the ACA is that everyone carries part of the load, and for the vast majority of Americans the cost increases aren't as big as they seem (because now we won't be subsidizing the uninsured as we have in the past if the YI will enroll) or they are actually seeing cost decreases as I have."

"one car accident away from bankruptcy" does not mean much to someone just starting in their career who doesn't have much anyway, nor does it mean much to people who have never accumulated much by way of assets.

The premise of ACA is that it can transform a health care market built around the individual and turn it into a single system for a population ("the load"). Even when insurance provided a way for individuals to group together for insurance, the primary unit was still the individual. It's a subtle shift in language to go from talking about "group insurance" to the health of populations, but it's a massive shift for what it means in terms of who is responsible, who pays, how success is measured, and who has control.

It's ironic to talk about how "we won't be subsidizing the uninsured" at the same time we talk about "subsidies to make it more affordable." The main difference is the now open intent to redistribute wealth.

Everyone agrees government spending on health care is unsustainable and needs to come down. The question is, will that be done by individuals or on the basis of populations?

An individual will look at options available, cost, and make the most of what is available to them for their care. End result: the individual gets the treatment they want.

A government will look at options available, cost, and make the most of what is available to them for their populations. It does this through privacy-invading electronic records, comparative effectiveness research to override doctors on treatments, and limiting physician reimbursement to approved care. End result: some people get care and some don't depending on where their priority ranks in the population.

ACA is not just a flawed bill; it has a flawed premise.

HSAs make for better policy because they give more motivation to the individual.

If health care is a "right," then individuals will spend as much as possible.

If health care resources belong to the individual, then individuals will spend as little as possible.

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