The bad news just keeps coming for middle class Americans forced to purchase insurance under the Affordable Care Act.
The News & Observer reported last week that “Blue Cross and Blue Shield, North Carolina’s largest health insurer, is scrapping its June request for a 25.7 percent rate increase in favor of a larger rate hike: 34.6 percent.”
The insurer “is also eliminating some health plans in the Triangle and the Charlotte area. … [forcing customers] to select a plan with a limited provider network of hospitals, doctors, labs and other services.”
This is the final nail in President Obama’s false claim that “if you like the doctor you have, you can keep your doctor,” as it signals the end of plans that allowed many to continue seeing the physicians who have cared for us for decades.
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Neither gouging nor greed is behind BCBS’s proposed hikes. Because the ACA requires the insurer to pay out at least 80 percent of premiums on claims, they reflect real costs. They are due, in large part, to adverse selection – the fact that the ACA’s set-up makes it far more appealing to the poor and sick than the wealthy and healthy.
State and federal regulators might pare down the request. But, given the most basic law of economics – There is No Free Lunch – this would merely shift the burden, resulting in higher costs for other policies. Similarly, higher federal subsidies might cushion the blow for individual policy holders, but their gain will come at the expense of other taxpayers.
Three things about the ACA are now clear.
▪ Despite President Obama’s promises, the ACA was never designed to reduce costs but to expand coverage.
▪ Instead of reforming a broken system, it put the status quo on steroids, further entrenching the unholy alliance between big government and corporate America. As we see from the consolidation of the banking business following the Dodd-Frank “reforms” and of the health care industry following passage of the ACA, big government spawns big business as it imposes ever more rules and regulations that only the large and rich can navigate, meet and massage.
The current system may be terrible for the American people, but it feeds our leaders’ desire for power and money. Instead of partisan bickering over the failed efforts of both parties, we, the people, would be better off exploring avenues for true reform.
I’ll start sketching out an approach discussed by some experts that is both visionary and politically possible: It meets the goals set by Democrats and Republicans by providing universal health care while controlling costs through free market competition and personal responsibility.
The concept is simple: Make health insurance real insurance.
We don’t expect our car insurance to cover oil changes or our homeowner’s policy to pay the handyman. So why should health insurance cover everything from ingrown toe nails to open heart surgery?
To truly reform the system, we should make Americans responsible for covering their own health care expenses up to a maximum of, say, 15 percent or 20 percent of their annual adjusted gross income; most people would spend much less. After that, the federal government should pay for everything.
This approach would be fair. The poor would have most expenses paid for as the wealthy pick up their own tab. It would not discriminate against people because of their age, sex or pre-existing condition. It would provide universal coverage (Democrats say yeah) and help control costs by making everyone have skin in the game (hear Republicans cheers).
While making health care completely portable – it would no longer be tied to one’s employer – it would almost eliminate the need for private insurance.
Imagine, no BCBS. I wonder if you can.
Unfortunately – and unavoidably – the government would still play a big role, especially as it set reimbursement rates. And, over time, our leaders would corrupt the system by imposing mandates and regulations.
You can’t reform the system in 100 words. I don’t know whether this approach would work. What I do know is the path we’re on is leading to a cliff.
Contributing columnist J. Peder Zane can be reached at jpederzane@ jpederzane.com.