The Senate Health Care Plan: Keeping America Sick and Poor

The Congressional Budget Office released its forecast earlier this week on the Senate Republican Plan to dismantle Obamacare.  It’s not pretty … 22 million Americans losing coverage, most of whom are losing Medicaid coverage, and diminished subsidies and higher deductible plans for low and middle income working families on “exchanges” that themselves will fade in significance.  And the CBO is right… for a waitress making $30,000 a year (the medium wage in the U.S.) a $6,000 deductible plan doesn’t work. Why bother?

Under the plan, employers who provide coverage will see higher premium costs and higher deductible policies. The phenomenon of “flat wages” will continue, with annual cost of living wage increases eaten up by increased employee health premiums. As health care costs continue to rise faster than the Consumer Price Index, employers will be forced to funnel all the money that might otherwise go towards raises into their employee health plans.

Savings to the federal deficit and national debt are relatively small, as the ACA’s surtax on high income Americans is eliminated. We will see costs shifting as the level of uncompensated, i.e., charitable care in our nation’s hospitals returns to pre-ACA levels and beyond.  With less people on insurance, we will once again have high rates of emergency room visits that hospitals are stuck paying for, who will in turn pass that burden onto state and local governments or those who are commercially insured.

One sector of the economy will benefit at least. The rise in employer-based insurance premiums which will bring higher profits to commercial insurance companies. Pharmaceutical drugs prices, already twice as expensive to Americans as the rest of the industrialized world, will continue to rise. The system will work well for those who finance and deliver care, who control Congress through their high-paid lobbyists and spin machines.

While they prosper, however, the “tapeworm” (thanks, Warren Buffet) in the belly impacting American competitiveness – unsustainably high healthcare costs – will continue. This is 25% of the federal budget, 18% of the economy, and yet reform is being attempted in the most cynical, corrupt, and harmful way possible. And so the most significant fiscal and humanitarian challenge facing the U.S. and its most significant failure in planning gets kicked down the road.

On the bright side, there are many examples of health care systems around the world, “best practices,” that deliver quality care to all their citizens at half our costs.  In those systems, we will ultimately find the path out of our crisis.

Until then, we’ll continue to play musical chairs … passing the hot potato to the states and onto struggling American working families, all without attending to the fundamental issues of cost, waste, and inefficiencies that scream to be addressed.

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