Sep 282010
 
Authors: Ian Bezek

The Affordable Care Act, otherwise known as this year’s health care reform bill, should be either gutted or repealed. It is failing to achieve the objectives it was designed to produce.

Health care reform was supposed to control costs while also expanding health care coverage for those currently lacking.
It marginally succeeds at one and completely misses the mark on the other goal. This is not good enough.

The health care reform will, over the next decade, reduce the number of uncovered Americans to roughly 15 million, according to the Congressional Budget Office.

This is an improvement from today, though it certainly doesn’t provide coverage for as many people as hoped for.

Those who are covered by expanded government programs will, over time, end up getting inferior access and care from their plans, as a third of doctors have already quit accepting Medicaid patients. This figure is likely to rise as the government looks to control costs in the coming years.

People covered with a government plan are increasingly likely to face rationing and loss of choice about treatments in the coming years as well.

Massachusetts, having already adopted a universal health care system, is facing sharply rising costs and is looking at aggressive means to control costs by limiting access to “low priority/low value services” and placing a total cap on the expenditures of the system each year.

While we aren’t about to witness Sarah Palin’s death panels, the quality of care provided by the government will sharply decline in the coming years as it begins to ration services and more doctors drop out of the system.

The other problem with this reform is that it simply doesn’t bend the cost curve like Obama promised. Health care spending, as a proportion of the total economy, has been rising sharply for years now.

Under Obama’s plan, however, the rate at which health care costs rise, as a proportion of the whole economy, will rise even faster than if we had done nothing, according to data compiled by Richard Foster, chief actuary for the Department of Health and Human Services.

So I take back my earlier comment. Obama bent the cost curve, but in the wrong direction. Health care costs will rise even faster than if we had done nothing. Amazing.

Proponents of the bill point to the fact that over the next decade, this bill will save the government a substantial sum of money. This is true.

But the savings comes from the fact that the government is shifting the burden of health care costs onto corporations and private citizens.

Shifting a cost is not the same as lowering the cost.

True reform would have lowered the rising trajectory of health care costs. This reform just tries to hide the problem with new taxes and regulations.

The core reform that makes the plan revenue positive for the government is the mandate that all Americans buy health insurance, with stiff fines for those people that ignore the mandate.

This mandate to buy health insurance, whether you want it or not, does several things. It forces healthy young people –– a main group that lacks health insurance today –– to buy insurance they don’t need, in effect subsidizing the whole system.

Young people will pay far more in premiums than they receive in benefits, thus providing a source of new revenues for private insurers that will slow the rates of premium increases for existing customers.

The government is counting on this effect, plus the substantial revenue to be gained from fining those people who refuse to buy health insurance, to fund the rest of the health care reform.

The problem is that this mandate is probably unconstitutional. As the mandate is neither a tax nor a regulation that would pass constitutional muster on its own, its constitutionality is dubious.

Proponents argue that since many health care expenses cross state lines, they can be regulated by the interstate commerce clause of the Constitution. We’ll see if that dubious argument holds up in court.

If the mandate is struck down, the economics of the whole bill quit working. Even if the mandate survives, this bill isn’t the sort of reform we need.

We should repeal this bill and start over, with a focus on controlling costs.

Ian Bezek is a senior economics major. His column appears Wednesdays in the Collegian. Letters and feedback can be sent to letters@collegian.com.

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