Schminke: Truths of PPACA
Note: This is the first of a two-part guest column series by candidate Dennis Schminke on the Patient Protection and Affordable Care Act.
Four years after passage, The Patient Protection and Affordable Care Act (PPACA or Obamacare) — was implemented in 2014. Its passage, and its effects on the American people will feature prominently in the 2014 elections. Nancy Pelosi lectured, and we are now familiar with what’s in it. There have been many unpleasant surprises. Polling on PPACA has run negative for a long time — and trends more negative as time passes.
Defenders of PPACA will say that some good has come from it. The Medicaid expansion has allowed a few more people “free” coverage (not really free — someone pays for it). Those previously uninsurable or insurable only at a much-higher cost due to pre-existing conditions may buy discounted coverage. The kids are able to remain on mom and dad’s plan until age 26. The question for the adults in the room is: “At what cost?”
Here are some very uncomfortable truths underlying PPACA:
First: Everyone loves to hate insurance companies — especially health insurance companies. You might think they would have fought PPACA regulations tooth and nail. In fact, they came along quite willingly. Why? Because PPACA is essentially a grand bargain between our federal government and the health insurance industry: The insurance companies cooperate with the government to provide coverage for more people — reducing or eliminating some of the worst rating problems (example, pre-existing conditions). In exchange, the government requires (mandates) every American to buy their products. Presto … many more customers — many of them receiving taxpayer-financed premium subsidies — and more money to be made. This is crony capitalism at its worst. In the meantime our federal debt, deficit, and the cost of PPACA spirals out of control.
Second: After requiring everyone — young and old — to buy the insurance, artificial limits were placed on how much an insurance company could charge to compensate for the added risk of older policy holders or pre-existing conditions. This mechanism is at the core of what makes the PPACA work financially. It mandates winners and losers. It requires younger and healthier policy-holders (generally lower income and net worth) to buy over-priced policies, enabling older and less-healthy persons to purchase underpriced coverage. Whether you call this a tax or not — the net effect is one of the largest tax increases ever imposed by the federal government.
Third: We can make something cheaper by taxing it. There are many taxes — state and federal — most of them hidden — built into the law. These range from plan premium taxes to the infamous medical device tax. Does anyone believe that building additional costs (taxes) into the system inputs, will result in an output that costs less?
Fourth: PPACA is built on a flawed philosophy — force. It is a top-down, one-size-fits-all, federal-government-knows-best law with no room for individual choice or religious liberties. Citizens are forced to buy plans with all mandated coverages — whether or not they want them or need them. This is why 280,000 Minnesotans lost coverage they previously held — because their plan was no longer good enough.
Which leads us to the biggest problem of all: PPACA was sold to the American people on the basis of multiple untruths: If you like your plan you can keep it. If you like your doctor, you can keep him or her. Obamacare will save the average family $2500 per year in premium costs. It will not add a dime to our deficits. It will eliminate the problem of the uninsured. It has failed miserably on every one of these key measures.
Obamacare was passed because “we must do something about the uninsured.” The American people still believe this, but are very unhappy with the result that was delivered. “Fix it” has higher approval than “repeal it.” So we have an opportunity — to do it over and to get it right.
Successful models are out there. We have many examples of consumer-driven industries where choice, innovation, technology, competition, and peeling back regulations have resulted in better products, faster service, and lower cost: food, computers, telecommunications, airline travel, transportation, and financial services. It has even worked in healthcare (Lasix eye surgery, for example).
There exists a wide range of more efficient, consumer-driven, patient-friendly, market-based healthcare finance reforms that could deliver improved healthcare delivery at reduced cost for most people. These should be included in any bi-partisan effort to fix Obamacare.