Let's Do Talk About Healthcare

And the Obamanation of the Affordable Care Act

The one who smelt it, dealt it.

First, let me make clear that by healthcare, I am not referring to health insurance. In many people’s minds, the terms are interchangeable, and therein lies the problem.

Health insurance is not healthcare. It is my contention that how we handled health insurance in this country is part of why we have experienced inflation in the cost of healthcare.

Brief history - Health insurance wasn’t a thing until WWII. The government froze wages during the war via the Stabilization Act of 1942, and companies could not use pay as an incentive to attract employees to come work for them. Health insurance was a fringe benefit that wasn’t covered by the Act.

A man named Henry J. Kaiser, who owned shipyards and steel plants, started a healthcare plan for his employees as a way to retain and attract employees. His plan became the model, and you may recognize the name Kaiser Permanente. It says something interesting that Kaiser, as a heavy industry entity, ceased to exist by 1968. The more successful part of the Kaiser group became health insurance.

The idea of a Health Maintenance Organization (HMO) had its first genesis in 1929. Dr. Michael Shadid created a cooperative health plan in Elk City, Oklahoma. This included pre-paying for services and pooling funds among farmers. But would it surprise you to learn that Kaiser Permanente evolved into the first large-scale HMO?

The term HMO was coined in the early '70s, and in 1973 President Nixon signed into law the HMO Act of 1973.

I believe this is when the fact of widely available and cheap or no-cost health insurance began to have an unintended consequence. Please note that healthcare in the '50s accounted for about 5% of U.S. GDP, compared to 18% today. I believe that health insurance removed market pressure to keep the cost of healthcare down. The average person could afford things like stitches and broken arms.

Fast forward through the '70s when medical malpractice lawsuits became prevalent, pushing costs up as doctors and hospitals were pressured to make no mistakes. This meant medical malpractice insurance, more testing, and more expensive testing, etc.

Finally, as costs rose and companies moved away from free or very low-cost insurance, actual health insurance costs absorbed directly by consumers rose rapidly, becoming an economic burden in and of itself.

Please pause for a moment and think about how a product designed to reduce the economic burden for healthcare becomes an economic burden in its own right.

And fast forward now to the Orwellian-named Affordable Care Act.

The idea, supposedly, was to reduce the burden on the common citizen. In the name of the Act, “Affordable,” is the most prominent word. One would naturally assume it would mean that healthcare would be made more affordable.

No.

It meant that by forcing everyone onto a health INSURANCE plan, more money would be gathered up front, and cost-sharing would lower total costs for everyone.

This idealistic and ill-fated plan failed. One of the key expectations was that all these healthy people who weren’t on insurance—those 20-somethings who don’t go to the doctor and who historically opted out of their company’s health insurance—would start pouring some money in that they would not actually use. This would provide money for the chronically ill and keep expenses down for the sicker employees.

I attended a meeting prior to the 2016 elections sponsored by UnitedHealthcare. As part of the presentation, they explained why they had dropped out of the Health Exchanges. Why? Because they had become high-risk pools. Why did that happen?

Idealism over reality. Twenty-something healthy people weren’t going to get on insurance. The tax that was put in place was less than the cost of insurance. They made an economic decision. Don’t spend any money and buy beer, or spend money and have less beer just in case I get sick. Pfft. Beer wins.

That decision was predictable if you weren’t looking at healthcare through idealistic-colored glasses.

Additionally, the administrative burden to doctors and hospitals skyrocketed. Also predictable. So, charges increased, of course.

Net impact? A boon to insurance companies. All the insurers consolidated into 5 main organizations: United Health Group, Anthem, Aetna (CVS Health, think about that for a moment), Cigna, and Humana. And Kaiser Permanente is an integrated health system with both insurance and healthcare delivery under one roof.

Thanks to the ACA, money has been rolling into those organizations.

Yeah, so that’s a lot. What do we do about this? Sadly, as Paddy discusses in The Rot, helplessness contributes to extreme actions. The idea that we should totally depend on government creates a dependent and helpless mindset. The average person does not believe they can do anything. And once you give up, welcome to the machine.

Don’t give up. Get informed and put sustainable pressure on your elected officials. Much to the dismay of certain political elites, voters do rule. Don’t get tired, don’t get complacent, and don’t take your eye off the ball.

The question not asked and therefore not answered by the ACA is: Why is healthcare so expensive in this country? Don’t get lost in insurance. Removing insurance from the equation—whether public like in much of Europe, or private like in much of the USA—the raw cost of a hip replacement for, say, a visiting prominent Democrat in Germany is quite a bit lower than in the USA.

Average cost in the USA: $30,000 to $50,000. In Europe? $10,000 to $20,000.

Why? This is the question to be asking—and asking. Why? Then, we must address the fact that health insurance companies are viewed as today’s equivalent of Robber Barons. They have control over healthcare they simply should not have. Why?

Part of the reason is that our elected officials present idealistic bullshit masquerading as compassion, hiding the fact that the love of money is at the root of all evil.

Money, people, money. Hold your elected officials accountable.