For better or worse, President Obama’s health care reform bill is now law. The Patient Protection and Affordable Care Act represents the most significant transformation of the American health care system since Medicare and Medicaid. It will fundamentally change nearly every aspect of health care, from insurance to the final delivery of care.
The length and complexity of the legislation, combined with a debate that often generated more heat than light, has led to massive confusion about the law’s likely impact. But, it is now possible to analyze what is and is not in it, what it likely will and will not do. In particular, we now know that:
* While the new law will increase the number of Americans with insurance coverage, it falls significantly short of universal coverage. By 2019, roughly 21 million Americans will still be uninsured. * The legislation will cost far more than advertised, more than $2.7 trillion over 10 years of full implementation, and will add $352 billion to the national debt over that period. * Most American workers and businesses will see little or no change in their skyrocketing insurance costs, while millions of others, including younger and healthier workers and those who buy insurance on their own through the non‐group market will actually see their premiums go up faster as a result of this legislation. * The new law will increase taxes by more than $669 billion between now and 2019, and the burdens it places on business will significantly reduce economic growth and employment. * While the law contains few direct provisions for rationing care, it nonetheless sets the stage for government rationing and interference with how doctors practice medicine. * Millions of Americans who are happy with their current health insurance will not be able to keep it.
In short, the more we learn about what is in this new law, the more it looks like bad news for American taxpayers, businesses, health‐care providers, and patients.
In today’s bureaucratically dominated health care system, the patient’s major role is to sign the forms that authorize one large, impersonal organization to release funds to another. Government, through Medicare and Medicaid, buys close to half the health care provided in America today. Most of the other half is paid for by insurance companies, through policies purchased by third parties, because the tax laws encourage people to rely on first‐dollar health coverage from their employers.
When health care appears to be free or very cheap, people buy more than they would if they were paying the full cost. The resulting casual attitude toward shopping for health care drives up prices, drives up insurance premiums, and creates hardship for business and those without insurance.
The Goodman and Musgrave solution is to restore power and responsibility to individuals. They propose that consumers be free to set up tax‐free medical savings accounts to cover routine medical expenses. Since the money in those accounts would be the property of individuals, they would have an incentive to spend wisely on health care.