Two years after the Patient Protection and Affordable Care Act (PPACA) became law, promises to reform health care keep colliding with reality.
The goals of reform were to lower costs, improve quality and coverage and protect consumer choice and reduce the federal deficit. The latest evidence shows that not all of these promises will be met.
Promise 1: “The only change you’ll see are falling costs.”
In his June 6, 2009 radio address, President Barack Obama reassured Americans they would be able to keep their current health plans and doctors and promised, “the only change you’ll see are falling costs as our reforms take hold.”
The president also warned that if we did nothing about health care costs, we’d be spending one dollar of every five on health care, so he promised that reform would attack the root causes of skyrocketing health care costs.
Now, the federal government reports that millions will lose their current coverage under PPACA. Even worse, millions of Americans have indeed already seen change, but it is not positive.
Between 2008 and 2012, the number of individuals without health insurance increased by 6.5 million.
Data from the National Health Expenditure Projections 2010-2020 report shows that after slowing down like the economy, health care spending will speed up again under PPACA.
Between 2005 and 2010, the annual rate of national health expenditure growth declined from 6.5 percent to 3.9 percent. Under PPACA, it will re-ignite, growing 19 percent faster than the economy as a whole, and reach nearly 20 percent of Gross Domestic Product.
Promise 2: The cost of insurance will be lower
The president said the typical family would save an average of $2,500. However, a recent Kaiser Family Foundation survey shows that employers and employees continue to pay more for health care. Average premiums for family coverage increased 9 percent between 2010 and 2011, much higher than the previous year’s 3 percent increase.
The administration has insisted that costs would be lowered by creating new insurance pools, through exchanges. But the data shows that spending for each person enrolled in an exchange will increase faster than spending in employer-sponsored insurance between 2016 and 2020. Costs are going up, not down.
Promise 3: Improve coverage and protect consumer choice
In Wisconsin, we already have one of the country’s highest rates of insurance coverage. While it is projected that PPACA would increase coverage nationally, much of the new spending will substitute public dollars for private dollars rather than improving coverage. Nationally, the insurance rate will increase to 92 percent, a rate which Wisconsin has already achieved. The nonpartisan Congressional Budget Office (CBO) estimates that despite higher costs, fewer people will be covered under PPACA than was previously thought.
Promise 4: Significantly reduce our deficit
A month before PPACA became law, the president declared that health care reform would bring down the cost of Medicare and Medicaid and “… significantly reduce our deficit.”
But according to CBO, federal spending for Medicaid and the state Children’s Health Insurance Program will increase by $931 billion between 2014 and 2022 under PPACA.
During the health care reform debate, we were promised the cost would be under $1 trillion. The CBO now projects the gross cost of PPACA will be $1.8 trillion and the net cost after collecting penalties and taxes will be $1.3 trillion.
PPACA uses reductions in Medicare spending to further offset the increased costs. So to reduce the deficit as promised would require cutting Medicare spending by more than $1.3 trillion.
We would all like more coverage at a lower cost. But the more we learn about PPACA, there appears to be fewer benefits to Wisconsin at a greater cost.
Wisconsin has already achieved the insurance rates aspired to under PPACA and few people think the distant federal bureaucracy understands Wisconsin better than its patients, providers, health plans and investors.
The Obama Administration seems to have adopted a strategy based on the novelist Carl Buechner’s phrase, “they may forget what you said, but they never will forget how you made them feel.”
While the administration is trying hard to convince the American people of PPACA’s merits, the data coming from the federal government suggests it is not the type of “reform” Wisconsin wants or needs.