No Matter What Bill They Pass, Health Care Costs the Same Thing

The headline is essentially true…although in the overall scheme of things there are ways to lower the total cost of health care. But let’s walk through this together.

Let’s say that I wake up at 2:30 am tomorrow morning with severe abdominal pain and my wife rushes me to the local emergency room. There they determine that I have a hot appendix and it needs to come out. So they admit me, remove the appendix, and send me home when I am stable. No matter who is having this done or at what hospital, the cost of these services is let’s say $X. Now it gets interesting. There are essentially four ways to pay for this: 1) I am in the 1% and am self-insured and pay for this out of pocket; 2) via employer supplied insurance; 3) the money comes through Medicare or Medicaid; 4) I can’t afford to pay for it.

1) I pay out of pocket…but what do I pay…the billed amount? Or do I have an accountant negotiate a price? Either way I assume the hospital and the attending physicians make a profit. Not an issue.

2) My insurance company negotiates a set price for the services based on an assumption of volume provided to the hospital based on the number of individuals they cover in the hospital’s service area. And the get paid based on that set price from a combination of insurance money, co-pay, and deductible. Either way I expect that they are making a profit for the services provided.

2/3) the policies provided on the exchanges through the Affordable Care Act are probably somewhere in here.

3) Medicare and Medicaid are related but different. Medicare has a personal component based on what other plans and what other coverage levels an individual selects. So the hospital is still making some money but Medicare doesn’t pay as generously as private insurers. And Medicaid pays even less but I still suspect the hospital is making something.

4) You can’t afford to pay. The hospital isn’t going to turn you away…they can’t turn you away…but the cost to them to provide the service is still $X. The hospital is making nada. So what’s a mother to do? Increase the charges to all of those paying via out of pocket, employer provided insurance, Medicaid, and Medicare.

So what is the GOP doing with there House and Senate bills? Part of the claim is they are reducing the cost of health care…but to whom? Well nobody because the cost is still $X. But what they are talking about is the federal government’s contribution to health care. Cuts to Medicaid, cuts to support provided to insurance companies to participate in the exchanges, and cuts to subsidies and tax credits to individuals who get their health insurance through the exchanges. The revenues paying for those subsidies and supports and credits come from a number of taxes on the wealthy.

The cost of healthcare isn’t going to change…so if the ACA taxes on the wealthy are repealed…the costs transfer from the wealthy to those paying for their own healthcare…via out of pocket…employer insurance…Medicaid and Medicare. And since Medicaid and Medicare are big dollar government programs…they probably will only feel the changes in a small way compared to private insurance and private payers…so essentially the costs leveed against private payers will swell even more. So even if you have ‘good insurance’…taking people off of Medicaid and the exchanges and pushing up the deductibles and monthly costs as proposed by the GOP bills…everyone’s cost of insurance will go up…to cover that $X that remains unchanged.

Now earlier I mentioned that there are some things that can decrease the overall cost of health care. And that is actually the Medicaid expansion and the subsidized health care plans on the exchanges. Those Americans who have newly acquired health insurance have been visiting family practice doctors earlier and more often…and have started to achieve better health results through preventive care and earlier intervention in health risks…rather than relying on far more expensive emergency room care. In the long run that will result in a lower $X value for everyone and a far healthier population…better life…and more productivity…and more stable workers for employers.

Now one of the professed goals of the GOP is to reduce health care costs. None of the bills they’ve proposed have done anything to address health care costs. Not a word. Not a mention. Nothing. Nobody is talking about how much a hospital visit costs. Nobody is addressing how much prescription drugs cost. Nobody is proposing a real change in how we pay for health care successes. It’s all about destroying a previous president’s legacy and putting money back into the pockets of those who don’t even miss it…and are actually well served by how it is spent.

and where are the Dems with their own plan to improve health insurance coverage in the US? It is not time to remain mute…

Ok, I’ve rambled enough…and probably missed a number of points that are still stuck in the back of my head. But anything the repeals any part of Obamacare is a step backwards. We should be talking about fixing the Affordable Care Act…and there are certainly points to be made for fixes…rather than trying to rip it apart.


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