This is a critical moment for the future of health care. President Barack Obama’s market-based Affordable Care Act (ACA) has simply not lived up to many of its big promises, and House Speaker Paul Ryan’s politically toxic American Health Care Act (AHCA) would make things comically worse.
The AHCA proved, despite President Donald Trump and congressional Republicans’ big claims, that Republicans have no plan or desire to create a better health care system to address the American people’s needs.
This is an important moment for an honest assessment of how we could adopt a proven system that would actually deliver affordable universal care and the many hurdles standing in the way. This is the first article in a series, which will attempt to provide such an assessment.
Trump was able to successfully campaign on a new health care plan that would be “something terrific,” implying with his attacks on the ACA that he could lower drug prices, premiums, and deductibles. There is such a pent-up demand for these problems to be addressed that the public was willing to listen to a charlatan, who almost immediately proved to lack any real solutions.
Even under the ACA, many people find the health care system deeply confusing. They lack coverage, face outrageous surprise bills, or struggle to afford the premiums and out-of-pocket costs.
Among adults with insurance, 43 percent say they have difficulty affording their deductibles, half worry about affording care, and a third have had family postpone care because they could not afford the costs of treatment.
The public is potentially ready to consider implementing an alternative system. Polling shows a clear majority support a federally funded healthcare program providing insurance for all Americans. Fifty-eight percent favor an “universal form of Medicare-for-all.”
But getting from where we are now to a truly universal and affordable system is not going to be easy; if it was, it would have happened already. There are financial, political, and legal hurdles, as well as massive entrenched industries that will need to be confronted.
What is needed is a proper understanding of the goal, the options for how it can be achieved, the obstacles that will need to be overcome, and the way to push for reform.
Choosing words carefully
The United States spends dramatically greater percentage of GDP on healthcare than other countries with universal health care systems. Yet, the U.S. covers fewer people, provides less care, and there are worse public health outcomes.
If we want to make meaningful progress on these issues, affordable universal health care must have a defined meaning to make any fight real or else vague terms will be exploited.
Back in 2010, President Obama and Democrats distorted the English language when selling the Affordable Care Act as both “universal” and “affordable.” It was called universal, even though at the time Congressional Budget Office (CBO) said millions of americans would still be uninsured. It was called affordable despite the fact that its design inherently meant some people would face premiums even the law defined as unaffordable.
Similarly, some people having “insurance” they don’t feel they can afford to use was conflated with actual care.
While Democrats abused the language of health care reform, Trump went even further. He took it into a backroom to torture it until it would say “2 + 2 = 5.”
Just before taking the oath of office, Trump vowed his goal was “insurance for everybody” before immediately turning around to push for a replacement measure that would dramatically increase out-of-pocket costs for many and cause 24 million more Americans to be uninsured.
“Care” needs to be defined as access to emergency services and a minimum level of basic medical needs within a reasonable timeframe. The ACA had a decent definition for the minimum level of medical care, but it just didn’t make it affordable. Insurance you can’t afford to use is not really care.
In response, some Republicans are trying to redefine what counts as basic care in the name of “affordability,” but insurance you can afford, because it doesn’t provide basic medical care, is even more useless.
“Affordable” must mean that making use of this basic level of medical care wouldn’t create a financial hardship. In the simplest terms, this means no one in the system seriously concerned about a health issue should be discouraged from seeking care due to cost.
This is one of the greatest shortfalls of the Affordable Care Act. Even with the subsidies, a 45 year-old making just $40,000 a year is expected to pay nearly 10% of their income in premiums for a plan with a deductible around $3,500 and an out-of-pocket limit of $7,150 for covered in-network services.
The amount doesn’t cover all possible medical expense, and there is the real possibility that even if you do your due diligence to go to an in-network hospital you might end up with a surprise medical bill from an out-of-network doctor at the hospital. Any affordable system needs to prevent this type of abuse.
Besides what they pay in taxes, people in many countries are expected to pay basically nothing out-of-pocket for basic medical care. Most out-of-pocket health care spending is for uncovered services like dental or nominal co-pays for doctor visits or prescription drugs. For example, in Sweden in 2015, the annual out-of-pocket limit for medical visits is roughly $123 and $246 for prescription drugs.
The Netherlands and Switzerland have two of the most “market based” health care systems in Europe. In the Netherlands, middle class people that don’t qualify for subsidies have a deductible equal to $415 and even that is seen as too burdensome to many political parties there.
In Switzerland, subsides cap your premiums at 8 percent of income and the highest deductible plan you can choose has a deductible of effectively $2,500 and further coinsurance spending limited to an additional $700. In addition, for all plans, maternity care is covered with zero out-of-pocket cost. These high deductible plans are meant almost exclusively for young adults to lower their premiums. Most people in Switzerland simply choose to pay slightly higher premiums for plans with a deductible of just $300.
Making our system at least as “affordable” for all middle class Americans as the highest out-of-pocket plan in the European country with the highest out-of-pocket costs should, at least, be seen as an absolute minimum benchmark.
With 62% of Americans reporting they would have trouble coming up with the cash for a $500 emergency, it may make sense for the country to adopt a plan that makes essential care cost-free, aside from nominal co-pays.
To adhere to our definition of ‘affordable,’ the out-of-pocket limit at worst shouldn’t exceed one biweekly paycheck. And even that amount would still be a burden for many since unexpected health care costs often come hand-in-hand with a loss of working hours.
“Universal” at minimum should mean a system that provides a basic affordable care for effectively all citizens and legal residents at a reasonable price. Ideally, this would mean a system that would automatically enroll everyone, but there is minor leeway.
There are always a few individuals who choose to live off-the-grid or have strong religious beliefs who may refuse coverage, but a universal system must be defined as one that is actively providing basic care to everyone who wants it, at a price they can afford.
Under even some decent international systems, enrolling every single person can be impossible. For example, Belgium, Switzerland, and the Netherlands have an uninsured rate around 1%. In policy terms, that means the goal should be a plan the CBO scores as covering at least 99%.
Affordable universal care can be treated as a buzz phrase. It needs to be a clear and defined bench market that we can work towards. Otherwise, it is always going to be politically easier to simply redefine “affordable” or “universal” than making the tough changes our system needs.
Fortunately, there are plenty of models from other countries that show how we can achieve affordable universal care.
The next part of the series will focus on how other countries use different methods to achieve this goal and what would need to happen to move the United States in that direction.